The future belongs to electronic toll collection

A study on tolls drives home a fact that road warriors have already noticed on some level, that the future belongs to electronic toll collection.

Netherlands-based KMPG International, one of the “big four” global accounting firms, issued a second edition of its Toll Benchmarking Study, which measures the efficiency of current tolling operators. The first edition was published in 2015. This year’s edition is based on 2018 data.

There were 65 toll operators surveyed, 55% of which operated in North America, 22% in Europe, 14% in Central and South America and 9% in Asian or Pacific countries. Just over half were publicly owned.

The key to fiscally efficient toll collecting, according to the report, is to get rid of toll booths and the people in them. The most efficient toll collectors use open road tolling and electronic toll collection.

By doing so and some related measures, the most efficient toll operators also cut down on back-office costs

The average total cost to collect tolls, after removing outlier data and including electronic and manual collection systems, is 22 cents per transaction. All-electronic toll systems lower the total cost to collect to 20 cents per transaction.

Manual toll collecting costs 50 cents per transaction. Video toll collection, where machine-read license plates are used to bill motorists, cost 38 cents per transaction on average.

Change is coming to toll collection.

While only 7% of surveyed operators reported having systems less than a year old, 41% said their systems were 1-5 years old. There were 39% reporting having systems 6-10 years old and 14% with systems 11 years or older.

Three-quarters of survey respondents said they are planning a major upgrade within five years. About 20 percent say they are planning a major upgrade within a year.

The study also looked at “leakage,” or the amount not collected from violators.  Some operators report leakage of 1% or less. All of those use all electronic tolling.

Operators reporting the highest leakage rates tend to have a lot of out-of-jurisdiction users and lack the ability to prosecute violators, or they have decided not to prosecute violators. More than half of the operators in the survey reported having decided to not prosecute violators.

KMPG’s report offered several predictions.

Toll systems will affect more than just toll collection. Toll systems will be a means for planning traffic flow and investment, according to the report.

“Ultimately, we can picture a world where regional entities state to control access to road networks (similar to the way track access is managed in the rail sector) and, eventually, start to serve as the integration layer across all modes of transport (as mass transit becomes more intermodal and personal transit become more centrally managed),” the report said.

Also in the report:

• One in five toll road operators surveyed say they expect toll collection to be totally automated at some point. Also, one in five predict autonomous vehicles to be a factor in tolling.
  
• Consumers expect toll paying to be no different than buying a coffee at Starbucks with their smartphones. “Customers now expect conveniences they experience in one part of their life (such as online and mobile payment capabilities) to be available in everything they do,” according to the report.
  
• In time, toll agencies will connect directly to people’s bank accounts, reducing the need for many back-office functions and reducing the potential for fraud.