Pay as You Drive
Fixed costs of vehicle ownership, such as insurance costs or registration fees, do not currently depend directly on the amount the vehicle is driven. Projects in this category are designed to convert those fixed costs into costs that vary according to the miles the vehicle is driven, thus giving the driver the incentive to recognize these costs when making the decision to drive. Strategies in this category are unique in providing drivers direct financial savings for reducing their driving. Advanced projects relying on Global Positioning System (GPS) may be able to make an even finer distinction for pricing of auto use according to time and location of travel.
Pay as You Drive Examples
- Minnesota: Mileage-Based User Fee (MBUF) Research and Outreach - Minnesota DOT (MnDOT) received VPPP pilot funding in September 2006 to conduct statewide outreach on application of MBUF in Minnesota. Subsequently, in May 2011, MnDOT began conducting technical research of using MBUF as an alternative to fuel tax. This project developed into a statewide effort to investigate public understanding and opinions of mileage-based charges, via interviews with transportation experts and the public, focus groups with Minnesota drivers, a large sample qualitative public survey and an MBUF Policy Task Force that evaluates issues related to a potential MBUF system.
- Oregon: Mileage-Based Road User Fee Evaluation - The Oregon Department of Transportation (ODOT) conducted a test designed to demonstrate the feasibility of area-wide, mileage-based road user fees as well as congestion pricing. The purpose of the pilot test was to demonstrate the technical and administrative feasibility of implementing an electronic collection system for mileage-based user fees and congestion tolls. The on-board technology was demonstrated in May of 2004. Twenty trial vehicles were equipped with the on-board devices in the Fall of 2005. In the spring 2006, after verifying successful functionality, 260 trial participants in Portland, Oregon, had the on-board equipment added to their vehicles. For a period of one year, participants paid distance charges rather than the fuels tax (when they filled up at the station, the fuels tax was deducted from the bill and the mileage charge was added). At the conclusion of the study, ODOT successfully demonstrated the feasibility of both mileage-based user fees and congestion pricing. ODOT is now conducting additional pilots that give drivers options and address security concerns, using devices without GPS as well as devices that link to GPS already in drivers’ smart phones. As a result of the success of the pilot programs, Oregon is now considering making the mileage-based road user fee program into law in 2014. The law would require vehicles made in 2015 or later and getting at least 55 miles a gallon to pay the road user charge.
- Additional Pay as You Drive Examples