Friday, 18 September 2020

So will Wyoming really implement road user charging for all vehicles?

Quietly, Wyoming has been investigating whether road user charging could replace its fuel tax.  On Monday 21st September, the Transportation, Highways & Military Affairs of the State Legislature will be discussing a draft Bill (PDF) to implement a "road usage charge" for the state.

The Bill proposes that all Wyoming registered vehicles be subject to RUC, with six categories of vehicles and per mile rates as follows :

  • Motorcycles (US$0.013);
  • Private cars (US$0.0215);
  • Pickup trucks and vans (US$0.0287);
  • Buses and rigid trucks (US$0.065);
  • Single trailer trucks (US$0.1032); and
  • Seven of more multi-axle trailer trucks (US$0.1435).
It includes provision to charge vehicles from other states by any means available to Wyoming residents, but also mileage permits (prepaid distance) or time permits.  It also proposes that any (state) fuel taxes paid be credited to any RUC account.

The draft Bill requires that there be at least one manual method of distance measurement and one means to prepay for "unlimited" distance in a given time period.

On the face of it, this is revolutionary, if it received political approval it would make Wyoming the first jurisdiction not only in the United States, but globally, to mandate RUC for all vehicles registered on its territory.  

Wyoming has been investigating RUC for several months, so this is a very bold step, and it raises a lot of issues, not least being the time and effort required to set up systems for the vehicles of the entire state to switch to RUC, AND require vehicles from neighbouring states to pay RUC (noting that three Interstate Highways pass through the state and it has borders with six states, Montana, South Dakota, Nebraska, Colorado, Utah and Idaho). Although Wyoming's population is less than 600,000 and the motor vehicle fleet is less than 300,000, it is still an ambitious and courageous endeavour, and one that shouldn't be taken lightly, because there are two big lessons from the implementation of road user charging/road pricing:
  1. Get the public to accept the case for road user charging. Without public acceptability, the policy is dead.
  2. If you fail with your first attempt, you can't try a second time for at least ten years, because the public, stakeholders (and the media) will remember why it failed the first time.
Wyoming needs to bring the public on board, on grounds of fairness and necessity AND it needs to progress a programme that will not only be acceptable to the public, but will work in terms of minimising administrative costs to government, minimising compliance costs to users and be readly enforcement.

Earlier work indicated that there is a funding gap of US$135 million per annum to maintain the network at its current standard (which is already not ideal), so it is designed to address that,

So to implement this, there will need to be accounts for all owners of vehicles in Wyoming, and then permits (or accounts) for all out of state vehicles transiting Wyoming.  That may be done with a mix of private account managers and the state, and for some vehicles it will mean in vehicle equipment, but for others it will mean recording odometer images (and for heavy vehicles it may mean hubodometers).

Now the proposal appears to have been, in part, informed by Wyoming's advisors, engineering consultancy WSP, and the draft bill raises a whole series of questions, so I thought I'd quickly give a few thoughts:
  • Six categories of vehicles is curious. It's curious to include motorcycles (which no other RUC system anywhere has included - no, Singapore's ERP is NOT a RUC system), that I can't imagine the transaction costs involved in including them (let alone enforcing RUC against out of state motorcycles).  There are so few categories for heavy vehicles it is extraordinary, as this provides next to no opportunity to vary rates by mass (as categories) or configuration (to reward more road-friendly configurations).  Other full network heavy vehicle RUC systems (Oregon, New Zealand and Switzerland) have much wider categories by mass and configuration, that this over-simplification will mean the heaviest vehicles will subsidise lighter ones, and there are no incentives to have additional axles and tyres to reduce road wear.  Category 3 is odd indeed, either make it similar to passenger cars or make them light trucks. 
  • There are variations between commercial account managers and state provision. The state can be the RUC provider and can subcontract retail outlets to open accounts on its behalf. This is exactly what happens with prepaid distance permits in New Zealand, which can be bought at some gas stations, post offices and some other outlets.
  • Rate adjustments according to inflation are all very well, but in both Oregon and New Zealand, this is not the main source of information about rate setting.  Both jurisdictions (and in fact European ones) use cost-allocation models to help inform what rates should apply to different types of vehicles based on what vehicles generate costs on the road network (informed by spending). It's a sophisticated process, but it minimises cross-subsidies between groups of road users.
  • Having a process to credit fuel taxes paid means having a system parallel with the RUC system, which can be tricky especially for private automobile users. If payment isn't automated, there needs to be a verifiable system to identify gas tax collections and credit it to the RUC account. There are a lot of ways of doing this, but they need to take into account those who pay cash for fuel, and those who have their own fleet filling stations.
  • Minimise exemptions, they can cost a lot of money and provide opportunities for fraud, but ensure you make vehicles that spend very little distance on public roads, such as some farm equipment, exempt (not tractors that can drive many miles on public roads or farm trucks). Consider that if a type of vehicle typically spends only a few miles on public roads a year (e.g. by going from one part of a farm to another) then there is no point collecting revenue on a per mile basis from them.
I thoroughly encourage Wyoming to be ambitious, but bring the public with you and make sure you do it right first time.  There are plenty of jurisdictions that have tried to implement road pricing/road user charging programs and failed (see Edinburgh and Manchester in the UK, Copenhagen, Finland, the Netherlands, Vancouver congestion pricing), you don't want to be the first in the USA to fail because you sought to do too much too soon.  The UK tried moving to RUC for all vehicles around 15 years ago, but it resulted in a massive public backlash that killed the idea off completely, and is only NOW being gently explored. Meanwhile, UK fuel tax revenue has not been able to be inflation adjusted since 2010.

What should be done instead?

Start with a smaller group.  Electric vehicles, plug-in electric vehicles and hybrids are a small group, but raise enough issues to start off with, and they are part of the core problem.  Sure, Utah and Oregon have kind of followed this, but you can do this within 18 months with the right direction and experience applied.

Another group would be heavy vehicles, which have their own complications, but would generate more in state transit revenue and once done, it is easier to roll out to light vehicles.

Don't rush, do it right.


Monday, 24 August 2020

London congestion charge changes are more about raising money than congestion

London's congestion charge was pioneering, not because it was the first, or even the best congestion pricing scheme in the world (Singapore won that and still does), but because it demonstrated that congestion pricing could be introduced in a country and city with a very different political and policy culture.  It has evolved a little since then, but remains an area charge with a flat charge for access all day on weekdays.

It was a success, it achieved its original aims, as charged traffic dropped dramatically, allowing for road capacity to be taken from cars, vans and trucks, to be dedicated to buses, taxis, bicycles and in some cases pedestrian space.  However, its simplicity and its scale has proven its limitations.  These are:
  • Vehicles entering or driving within the zone pay once for a full day's access.  This encourages drivers to drive frequently once they pay, mostly discouraging occasional trips;
  • A significant proportion of vehicles driving in the congestion charging zone either do not pay or are heavily discounted.  Estimated at around half;
  • All vehicles subject to the charge pay the same. So a small car pays the same as an articulated truck (which takes up the space of three vehicles).
The Covid19 crisis has resulted in the UK taking drastic measures to establish social distancing in public, including addressing the risks of crowding on public transport in London.  Of course, the safest mode in social distancing is driving, but in London this is not physically possible for most trips towards inner London.  There simply isn't the road space to accommodate them.

Transport for London announced in June 2020 changes that are described as "temporary" purportedly to ensure car traffic "does not double", but the changes in scope go far beyond what is reasonable to do this (and in some cases don't do enough, because the congestion charging zone only covers 1% of the land area of Greater London.

Recent changes to the congestion charge mean it isn't really what it is called anymore.  Sure it is a "Road User Charge" according to Section 295 of the Greater London Authority Act 1999 but although it may resemble a scheme to manage congestion, the scope of operation is much wider.

Instead of simply operating 0700-1800 weekdays (excluding public holidays), its operating hours have been extended as follows:
  • Operating hours are now 0700-2200, leaving only nine hours a day which are not subject to the charge;
  • Operating days are now seven days a week, including all public holidays except Christmas Day.
Further changes are:
  • New applications for the Residents' Discount have been closed since 1 August;
  • The daily price has increased to £15 (US$19.70);
  • A new reimbursement scheme for relevant NHS and care home staff and patients;
  • The charge can now be paid up to three days after travel, at the higher rate of £17.50 (before it was two days).
Yes there is congestion during the day on Saturdays and to a lesser extent on Sundays, and early evenings it can also be congested (and later on a Friday night). However, by no reasonable measure can it be said that at 0700 on a Sunday that there is any congestion issue in central London, nor at 0800, or 0900 or 2100. 

The press release notes that the removal of the Residents' Discount is to deter car ownership for those living in central London, albeit that it seems reasonable that those living in central London pay to use the roads the same as everyone else. The price increase and some altering of operating hours would be justified, certainly to 1900 weekdays or beyond, and indeed Saturdays 1100-1800 and even Sundays 1200-1800 can be justified in parts of the central zone.  However, it seems that this is really about money as much as anything.  TfL faces a financial crisis due to the collapse in fares revenue due to Covid19 and the previous end of central government grants for operating subsidies.  

It's notable that TfL reports that only 0.5% of cars entering the charging zone do so daily (like a regular commuter), indicating that car trips that are taken tend to be occasional and are for very specific purposes (e.g. I twice drove into central London to pick up a friend after medical appointments).  Just over half only enter the zone once every six months, indicating that car trips to central London are much more deliberate than habitual, and so aren't necessarily able to be readily replaced by other modes.  

This is the point, virtually NOBODY drives to work in central London.  It is far too slow, and parking is too expensive. So the changes that have been made essentially capture leisure and shopping trips, but most importantly for TfL will generate new income. 

It isn't just about cars either, trucks and delivery vans are all captured, so deliveries and freight will now be charged more frequently. Private Hire Vehicles (minicabs) are also captured, but this will make little difference to them except at weekends, as vehicles are only ever charged for one trip, so extended operating hours on weekdays will not mean they are charged more.

London's problem is that the charging scheme as it stands is too inflexible to adapt to changing patterns and can't be extended easily under the current area charge model.  Although there is often talk about a GNSS supported distance based charge, this would require vehicles to be equipped with new on-board equipment.  A quicker approach would be to lay out multiple cordons (not area charges) with vehicles charged for entering and crossing different zones, similar to how some Italian cities have licensed permit zones for vehicles.

The biggest risk with TfL expanding the congestion charge's scope so bluntly is that it makes the idea that it is about managing congestion difficult for motorists to believe, and so trust in any other measures to expand charging will be low. There is little evidence that the Mayor of London regards reducing traffic congestion to be an important policy objective, whereas to gain the consent of motorists and more importantly, to deliver economic value from road pricing, the act of charging for road use should be in exchange for a better level of service.  

As was noted four years ago by the London Assembly, the current London congestion charge is not fit for purpose.  It needs to be transformed, but it's not clear that there is the political will, on either side of politics, to make a quantum leap in the performance of London's road network through a combination of pricing and investment in the network.

Friday, 7 August 2020

Australia : Requests for Expressions of Interests: National Heavy Vehicle Charging Pilot (UPDATED)

CLOSING DATE EXTENDED

The Australian Commonwealth Government Department of Infrastructure, Transport, Regional Development and Communications (DITRDC) has published on the Austenders website three Requests for Expressions of Interest in supplying services to support the Large Scale On-Road Trial which is part of the National Heavy Vehicle Charging Pilot.

The closing date is 17 August 2020 at 1400 (Australian Eastern Standard Time).

There are three Requests for Expressions of Interest, namely:


You need an Austenders account (free to set up) to access the documents.  If you have one, they are available through the links for each of them as listed above.

There was a question and answer process following industry briefings for the trials, for which the answer document is here (PDF).

As can be seen by the titles, these are requests for expressions of interest to supply the services and equipment needed to deliver the Large Scale On-Road Trial, which is expected to have around 100 participant operators with around 1000 vehicles.  It will be a mock-billing trial, with participants receiving mock invoices (or purchasing mock permits) to simulate distance-based road user charging for heavy vehicles.

(Disclaimer: Milestone Pacific is technical advisor to the Department of Infrastructure, Transport, Regional Development and Communications on this project)


Introducing Milestone Solutions

Hi everyone, I just want to note that D'Artagnan Consulting LLP (and its Australian subsidiary D'Artagnan Pacific Pty Limited) have changed names to Milestone Solutions LLP (and Milestone Pacific Pty Limited).  


Nothing else has changed. It is easier to say, easier for others to understand, and we are still the world's specialists in road user charging.  Our new corporate website is here.

Wednesday, 29 April 2020

Australia: Industry briefing of National Heavy Vehicle Charging Pilot Large Scale On-Road Trial Procurement

The Australian (Federal) Government's Department of Infrastructure, Transport, Regional Development and Communications has published a Notification of Industry Briefing, for its National Heavy Vehicle Charging Pilot.  The industry briefing will be held THIS FRIDAY 1 May from 0815-1030 Australian Eastern Standard Time (2215-0030 UTC/GMT 30 April-1 May) and then 1715-1930 the same day (0715-0930 UTC/GMT 1 May).  The first session is timed for Australian, New Zealand and North/South American interest, and the second one for Asian, European/African interest.

The text below is a verbatim extract directly from the notice:

The purpose of this industry brief is to provide information to, and obtain information from, potential tenderers for three planned solutions procurements for the National Heavy Vehicle Charging Pilot’s Large Scale On-Road Trial.

    Provision of telematics devices and services
    Provision of third-party invoicing services
    Provision of manual collection devices and reporting services

This briefing is not a procurement and does not form part of any Commonwealth procurement process. The Commonwealth will not select or exclude (from future participation in above procurements) any companies based on their attendance or non-attendance at the Industry Brief.

Following the Industry Briefing sessions, there will be a period in which the department will accept feedback submissions from industry on the proposed technical approaches to gathering data and generating invoices and mock permits.

The National Heavy Vehicle Charging Pilot (National Pilot) is an innovative industry partnership testing potential direct road user charging options for heavy vehicles. The Large Scale On-Road trial is anticipated to involve up to 100 participants providing more than 1000 vehicles across diverse industries and fleet sizes.  

Trial Participants will test several operational models for collecting and reporting distance travelled. Existing and charging-specific telematics systems will be tested, as well as non-telematics distance measurement technology (hubodometers).

No money will be collected from trial participants. Instead, the data collected will be used to generate mock invoices. The mock invoice will be used to calculate and compare alternate mass-distance and location-based charges with an estimation of annual registration and fuel-based road user charges (current PAYGO model) collected for each participant. 

END

Further details on the National Heavy Vehicle Charging Pilot are found on the Department's website

Disclaimer: D'Artagnan Pacific is technical advisor to the Department of Infrastructure, Transport, Regional Development and Communications