WASHINGTON BRIEFING
WASHINGTON
BRIEFING
M A R C H 2 9 - 3 1 , 2 0 1 5
A F O R U M O N C R I T I C A L T R A N S P O R T A T I O N I S S U E S
A N D L E G I S L A T I O N
The Washington Briefing brought together colleagues in the transportation industry to discuss key policy issues and challenges confronting toll agencies, concessionaires and state departments of transportation.
Washington Briefing
Washington Briefing
A F O R U M O N C R I T I C A L T R A N S P O R T A T I O N I S S U E S A N D
L E G I S L A T I O N
The International Bridge, Tunnel and Turnpike Association held its Washington Briefing on March 29-‐31,
2015. During the two-‐day meeting, delegates heard presentations and briefings from members of congress, congressional staff, and transportation policy experts from associations, academia, the media, the technology sector, state departments of transportation and toll operators. Delegates also visited more than 40 congressional offices to provide information about toll financed transportation around the country and around the world. This document is a summary of the presentations and discussions that took place during the Washington Briefing.
TABLE OF CONTENTS
What Is ‘Infrastructure’ Anyway?
Build a Mental Model for Tolling
Advice from the Transportation Media
No New Spending? Congress Can Still Help
States Try to Save Surface Transportation
State DOTs Feel the Crunch
Back to Basics: Pilot Programs to Increase Mobility
California Counties Help Themselves
Maryland Focuses on Existing Systems
Connecticut Considers Future Funding Options
A Half-‐Hour with Rep. John Delaney
Off the Record: Frank Talk from Capitol Hill Staffers
One-‐on-‐One Advocacy
Make the Most of Your Hill Meetings
The Head of AASHTO on Infrastructure Funding
APTA Supports Funding Increase
Moving Toward Intelligent Mobility
Plan Ahead, But Not Too Far Ahead
Bet on Tech to Improve the Customer Experience
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SETTING THE STAGE
What Is ‘Infrastructure’ Anyway?
You’ve heard over and over that America’s infrastructure is deteriorating. And you’ve heard of the infrastructure crisis. But what do we mean by the word ‘infrastructure’ anyway? And why does it matter?
Although it sounds like a simple (and silly) question, how we define the term makes a difference in how we think about infrastructure problems…and what to do about them.
That’s according to Dr. Jonathan Gifford, director of the Center for Transportation Public-‐Private
Partnership Policy at George Mason University’s School of Policy, Government and International Affairs.
The Center is conducting a study on alternative funding, financing and pricing approaches to infrastructure, so exploring the definition matters to him.
At the Federal level, “infrastructure” is a very broad term, incorporating many distinct classes of public facilities: Transportation (aviation, rail and roads), mass transit, intermodal transportation, water resources, water supply, wastewater management, solid waste and hazardous waste.
Traditionally, our definition of “infrastructure” has been associated with the physical construction and state of the asset. In surface transportation, this involves highways and bridges, he said. Literally, it meant the roads themselves. But now we tend to associate a bundle of services along with those roads and bridges. We expect certain safety, reliability and performance levels, for instance. Or we expect real-‐time information to be delivered to our mobile devices.
Gifford’s research is rooted in basic economic concepts, namely that firms benefit from infrastructure that enables larger geographical supply chain networks, access to larger labor markets and access to specialized manufacturing. The question of definitions matters because of another economic concept: scarcity. “Where should scarce resources be invested to expand or renew systems? Should we maintain everything?” Gifford asked.
“The question of definitions matters because of another economic concept: scarcity. Where should scarce resources be invested to expand or renew systems? Should we maintain everything?”
Expanding the scope of the definition adds to the cost of maintaining structures. It also raises the question, who actually depends on or benefits from infrastructure assets? When we think of infrastructure as something more than the physical road, it means acknowledging a wide range of stakeholders.
With better understanding of who stakeholders are, we can address the question of who could or should contribute to paying for infrastructure assets. Gifford’s study will also evaluate sources of funding, based on whether they generate adequate, sustainable and renewable funds.
Taking into consideration various stakeholders, one source of funding he’ll consider is tolling. Unlike the gas tax, tolling collects funds from users directly for a given infrastructure asset. In that way, stakeholders who get the most benefit are paying for their use.
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And where benefit to the user varies, tolling as a source of funding is more adjustable. “Historically, a gas tax isn’t a good proxy for signaling demand. It’s mostly invisible and unrelated to the time and location of usage,” said Gifford. “Tolls do a much better job of signaling demand.”
Build a Mental Model for Tolling
America has always had a love affair with cars, right? That’s a given, an article of faith that we take for granted.
In reality, the concept is not only new, it was introduced and promulgated by the automobile industry, said Dr. Peter Norton, associate professor in the Department of Science, Technology, and Society at the
University of Virginia.
People were upset that cities were being developed to make room for cars. Faced with negative public opinion, General Motors sponsored “Merrily We Roll Along,” a documentary purporting to tell the story of America’s love affair with cars. The program was broadcast on network television. “It was a history of cars in which there was so much love for cars that no amount of accommodation is too much,” said
Norton. “They’re telling you the history of the automobile is the history of a love affair.” The myth took hold, and became part of the public consciousness.
Norton, a historian, stressed the importance of telling stories that justify public policies. “I want to suggest that technology alone is not going to be sufficient, because we also have mental models that we’re up against, and these are the products of history,” he said. One example of a mental model is that toll roads cost money and free roads are free. In reality, ‘free’ roads are subsidized by taxpayers, while toll roads are paid for by users, a free-‐market concept.
What happens in history is that people who have an interest in the future will tell a selective story about the past, so that it seems to justify the future they want, said Norton. A challenge for the tolling industry is to recover the past so that tolling seems like a natural trajectory toward the future. “We need alternative pasts to justify alternative futures,” he said. “We inherited a history for us from people who have an interest in ‘free’ roads. People who wanted toll-‐free roads told a version of history that made certain conclusions that they supported.”
An example of an alternate future would be captured in a story about low-‐traffic roads where people pay for what they get. “We can have roads that are uncongested, relatively speaking, and we can let people finally find out if they like alternative transportation, because alternative transportation will finally be able to compete,” said Norton.
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Advice from the Transportation Media
Ashley Halsey III, a transportation reporter at The Washington Post, had frank words for attendees at
IBTTA’s Washington Briefing: “My sense is that when people think about tolling, they think about tolls going up,” he said.
Halsey and Ron Nixon, a reporter for The New York Times, talked about how the tolling industry is perceived by the public and the media. They offered advice on how to think about transportation media coverage.
Keep the Conversation Going.
When President Obama introduced the administration’s infrastructure plan, it proposed letting states impose tolling on existing highways. The industry should see that as an opportunity to talk to the public about the benefits of tolling, said Halsey. Nixon said that communications from the industry ought to emphasize that tolling isn’t mandatory. “It’s an option that’s thrown out there among many other options to generate revenue,” he said.
Adapt to the Speed of News.
Online publishing creates an immediacy that organizations have to get used to. “I understand there’s a process with the bureaucracy, but it does affect us in that we’re asked to do things faster, but the people we’re asked to get information from do not act faster,” said Nixon.
Reporters will reach out for comments or quotes, but they won’t hold up a story for you. Rather, the story will run without your participation.
Reach Out to Local Reporters.
Reporters at local publications are probably covering more than one beat. They may not be knowledgeable about your issues, so reach out to them proactively. Nixon suggests meeting with reporters and helping them along with information and checking in regularly.
When those reporters leave the paper, he said, ask for the name of their replacement. Halsey suggested having a fact sheet to distribute with bullet points of information you want to bring to their attention.
IBTTA Sends a Clear Message
Both reporters gave IBTTA high marks for their communications to the media. Ron Nixon said, “A few years ago, tolling was a non-‐starter. Today, people are talking about tolling. It is a process.” And Ashley
Halsey said, “From where I sit, IBTTA communicates its message pretty effectively. I hear a clear message from the industry. I regularly hear from IBTTA.”
BIG PICTURE: THE SURFACE TRANSPORTATION FUNDING LANDSCAPE
No New Spending? Congress Can Still Help
Reconstructing roads and reducing congestion are America’s two greatest highway problems, said Bob
Poole, director of Transportation Policy at Reason Foundation. It will cost an estimated $1 trillion or more for reconstruction and modernization of the Interstate highway system.
Fortunately, tolling is an answer to both problems. It’s an excellent way to mobilize large sums of money to finance major highway projects. Through variable pricing, it’s also an effective tool for reducing traffic congestion. “The direct cost [of traffic congestion] to highway users is $120 billion per year. That’s a staggering figure, yet we know how to make a big impact on that with managed lanes,” said Poole.
So, what prevents toll-‐financed interstate reconstruction? Why isn’t it a more widespread solution?
Poole offered a number of explanations, along with ideas to overcome obstacles to tolling. None of the suggestions requires new federal spending from Congress, he points out.
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Reinterpret the Ban on “Existing” Lanes
Federal law bans tolling on ‘existing’ lanes of Interstate highways. That’s the term that prevents roads already in existence from becoming toll lanes.
But the term itself is misleading and should be reconsidered, said Poole. When a lane is reconstructed because it passed the utility of its design life, it should no longer be considered ‘existing.’ He said: “If a bridge is worn out and needs to be replaced, it’s not an ‘existing’ bridge. It’s a brand new bridge. It’s a replacement bridge.”
By recognizing that replacement roads and bridges are ‘new,’ states should be allowed to finance their reconstruction with tolls. Congress should change federal law to permit tolling of new and replacement lanes, Poole suggests, an action that should be less controversial than raising the gas tax.
Address User Concerns
Highway users may resent having to pay tolls on existing lanes, said Poole. His suggestion is that tolling only begin when reconstruction is complete, and the funds be used exclusively to pay for capital and operating costs of the tolled facilities.
Users are also concerned about double-‐taxation—paying tolls and fuel taxes for the same assets. Poole suggests a technological solution, using electronic tolling to give rebates on state fuel taxes to drivers.
States Try to Save Surface Transportation
The nation’s infrastructure is in disrepair, and the federal government has been slow to act. The result has been a renewed effort to address infrastructure problems at the state and local levels. In fact, transportation issues were recently named the top priority of the National Conference of State
Legislatures (NCSL).
“It’s a pretty big deal, because they’re also dealing with health and education budgets,” said Jim Reed, group director at NCSL. “States are stepping up to fill the gap and bridge the uncertainty.”
As state legislatures move bills to deal with the infrastructure crisis, Reed identifies three trends:
One: Tracking with the Economy
Because the federal gas tax hasn’t changed in 20 years, inflation has reduced its purchasing power. So, some efforts at the state level have been around state gas taxes. For instance, 18 states and D.C. now have a variable rate gas tax indexed to the economy. As of March 30, 32 states had 81 bills in play dealing with gas tax increases.
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Two: Capturing All Users
Another trend involves capturing all users of surface transportation. Because gas taxes don’t apply to drivers of electric and alternate fuel vehicles, some states now levy fees at the time of registration to account for their use of surface transportation. Others have introduced “vehicle miles traveled” (VMT) fees. At least 60 VMT-‐related bills have been introduced in 21 states since 2008, said Reed.
Tolling also fits into this category. Thirty-‐two states already depend on tolling at the state or regional level. Twenty-‐two states currently have 65 bills working through their legislatures that could affect the tolling industry.
Three: Better Use of Existing Resources
State legislatures also are trying to make the most of funds they have. “Many legislators say we have enough money; we just need to spend it more wisely,” said Reed. In an attempt to be more efficient and accountable, states are turning to public-‐private partnerships (PPP), lockboxes, state infrastructure banks and other mechanisms for financing surface transportation projects.
Nonetheless, none of these financing mechanisms generates new revenue for the state. “What we need for all these financing mechanisms is a solid base of funding first,” said Reed. In other words, any long-‐ term solution will need to involve the federal government.
State DOTs Feel the Crunch
To keep the Highway Trust Fund solvent, Congress has transferred money from the general fund eight times since 2008. For the time being, that seems to be the path moving forward, said Jim Tymon, chief operating officer for AASHTO.
The federal gas tax hasn’t been raised in 22 years. Expenditures are currently $15 billion more than revenues, so the need for a long-‐term fix is urgent. “We’re really facing somewhat of a crisis at the federal level as it relates to transportation funding,” said Tymon.
AASHTO, which represents state departments of transportation, has proposed 35 ideas for the federal government to review, including VMT fees, sales taxes and freight charges. The proposals would give states flexible funding options and help put the HTF on the path to solvency. “It’s hard for us to get behind any one solution, so we’ve produced a set of revenue options for Congress to consider,” said
Tymon.
Congressional committees are working on a long-‐term bill, but the sticking point is how it will be funded.
Legislators from both political parties agree on the need to do something, but the House tax writing committee is still looking for a solution.
Meanwhile, states are doing their best to deal with the funding gap. They’ve had the most success when they could tie the funding mechanism directly to specific projects. The public finds it easier to support projects when they know how their money will be spent. When the federal government eliminated earmarks, it hampered its ability to fund specific projects. “The problem is that government has to say
‘just trust us.’ But the public doesn’t trust them to spend the money wisely,” said Tymon.
States have also benefitted from strong executive-‐branch leadership and the formation of broad coalitions of supporters.
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FROM THE FIELD: WHAT STATES ARE DOING
Back to Basics: Pilot Programs to Increase Mobility
When the I-‐85 Express Lanes in Georgia opened in 2011, commuters took 7,000 trips per day in the first month. Today, the lanes experience 23,000 daily trips on average. The highest toll for a full-‐length trip is
$10, but commuters continue to pay and the lanes are full.
The increased demand has begun to compromise reliable trip times, as the lanes sometimes underperform against FHWA’s 45 mph standard, said Chris Tomlinson, executive director for Georgia’s
State Road and Tollway Authority and the Regional Transportation Authority.
Testing New Incentives
Congestion is still a problem along the I-‐85 corridor, so Tomlinson’s agencies are piloting three new projects to promote alternate transportation modes.
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Shift Commute – The most congested time along I-‐85 southbound is 7am to 8 am. To encourage
Peach Pass users to drive outside those times, the pilot program offers credits of $3 per week if they travel outside the peak period three or more times on weekdays.
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Georgia Commute Options – This pilot program is meant to reward carpool riders. Participants in the program with a Peach Pass receive up to $100 per month in toll credits if they live and work in select Georgia counties.
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Ride Transit – This pilot entices drivers of single-‐occupancy-‐vehicles to ride mass transit. Peach
Pass customers who take buses on eight routes along the I-‐85 Express Lanes earn toll credits.
California Counties Help Themselves
Like every other state, California faces declining sources of traditional funding for its transportation needs. In response, local municipalities have taken matters into their own hands. Twenty transportation agencies have come together to form the Self-‐Help Counties Coalition. Together, they fund transportation projects with voter-‐approved sales taxes.
Michael Blomquist, toll program director for Riverside County Transportation Commission (RCTC), explained that voters chose to tax themselves in support of transportation projects because there is local accountability and transparency. The RCTC has continuous public communication to demonstrate how its annual budget will be spent. “The most significant public support comes from delivering the projects that the voters voted for,” said Blomquist.
“The most significant public support comes from delivering the projects that the voters voted for.”
Tolling – The Other Piece
The sales tax is insufficient to fund all the localities’ transportation projects, so tolling is an important piece of the program. Most new tolling in the state is planned as expressways, said Blomquist. The goals are to lower congestion or give commuters options.
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Tolling complements the sales tax by opening access to alternate financing sources, such as revenue bonds and TIFIA loans. The tolls are managed at the local level, so users are confident that the revenue is used for the construction, operation and maintenance of the tolled lanes.
Maryland Focuses on Existing Systems
Maryland has a system of eight toll facilities that it has maintained and expanded through a variety of mechanisms. Bruce Gartner, executive director of the Maryland Transportation Authority, highlighted several major projects.
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Construction of the Intercounty Connector (ICC) and I-‐95 Express toll lanes cost a combined $3.5 billion. The agency partnered with MDOT and the Maryland State Highway Administration to build the ICC and toll lanes.
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Reconstruction of two travel plazas along I-‐95 cost $56 million. MDTA concluded it had the financial resources but lacked the organizational resources to manage the projects, so both plazas were rebuilt utilizing a public-‐private partnership.
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For ongoing system preservation, MDTA has allocated $1.9 billion. The agency elevated the level of its inspection program to evaluate long-‐term needs.
Deploying the projects required MDTA to balance its financial capacity with its ability to deliver the project on time and budget. At the same time, the political environment was an ongoing factor, along with the agency’s organizational capabilities.
Connecticut Considers Future Funding Options
Like many states, Connecticut has an infrastructure problem. About 35 percent of the state’s bridges are structurally obsolete or deficient, and 41 percent of state and local roads are in ‘poor’ condition.
It has reached the point where tolling is an option again. Legislators are at least talking about reversing the state’s ban on tolling as they seek ways to fund infrastructure investment.
Garrett Eucalitto, undersecretary for transportation policy and planning, Connecticut Office of Policy &
Management, updated attendees at IBTTA’s Washington Briefing on the state’s transportation initiatives and how it might pay for them.
Connecticut has increased transportation capital spending 65 percent in the past four years, said
Eucalitto. In Feb., Gov. Malloy announced a 30-‐year plan to invest an additional $100 billion.
However, current revenue from gas tax, permits, fees and other revenue streams won’t be enough to pay for the investment. The governor has announced a commission to examine funding options and make recommendations. “We’ve been asked to look at all options on the table…because ultimately one option is not going to solve all of our problems in Connecticut,” said Eucalitto. He added that the governor is undecided and will wait for the commission’s report.
Nonetheless, the state legislature’s Transportation Committee has already reported out legislation requiring CTDOT to prepare a tolling implementation plan. Should tolling be a recommendation that’s put forth and adopted, the agency will already have a plan for moving forward.
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CONVERSATIONS WITH CAPITOL HILL
A Half-‐Hour with Rep. John Delaney
Increasing investment in infrastructure should be a top domestic priority, said Rep. John Delaney (MD-‐
6). On the same day the Obama administration proposed its GROW AMERICA Act 2.0, Delaney spoke to
IBTTA about increasing federal support for infrastructure.
Delaney first introduced the idea of renewing the Highway Trust Fund through repatriation of corporate income. Similar to GROW AMERICA Act 2.0, Delaney’s Infrastructure 2.0 Act would lower the tax rate on
U.S. corporations’ overseas earnings.
Although the current tax rate is 35 percent, corporations have the option to defer paying taxes indefinitely. Delaney argues that eliminating the deferral option and lowering the tax rate will increase revenues. In an unusual turn of events, the plan would raise revenue while cutting taxes. Equally important is that both political parties walk away with a ‘win.’
“What’s nice about this concept is it’s bringing together two ideas that both sides have really cared about for a long time,” said Delaney. Democrats would get the additional federal revenue they want, and Republicans would get the corporate tax reform they want.
The revenue raised from repatriation would be tied directly to infrastructure investment. A fund would be created for use by state and local governments. One purpose would be to attract private capital investment. The fund would act essentially as a bond insurer with the flexibility to lend money. Delaney claims it would fill a void, as there are not enough bond insurers working in infrastructure.
Investing in infrastructure is critical to U.S. competitiveness, Delaney said. Next to basic research, it’s the best investment that the federal government makes. “One of the big opportunities and challenges is that we compete in a global economy. The only way to come to grips with this is to acknowledge that it’s happening and bring our best game to the table. And we won’t compete unless we have great infrastructure,” he said.
Off the Record: Frank Talk from Capitol Hill Staffers
Three congressional staffers talked candidly with IBTTA members about the state of the transportation authorization bill. We’d love to share what they said, but we’re not allowed.
To encourage an open and free dialogue, the entire session was off the record .
Attendees to IBTTA’s Washington Briefing took away inside knowledge that will help their efforts to plan ahead. Don’t miss out on future opportunities to hear these insights for yourself. Be sure to attend next year’s Washington Briefing .
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IBTTA MEMBERS SPREAD THE MESSAGE
One-‐on-‐One Advocacy
Twenty IBTTA members conducted 40 visits with federal legislators or their staff members during
Advocacy Day. Armed with a compelling story about the benefits of tolling to finance infrastructure investment, the members travelled to Capitol Hill for face-‐to-‐face meetings. “The conversations we had were thoughtful, informative, and effective,” said Pat Jones, IBTTA’s executive director and CEO. “We need to continue to educate people one by one. We need to continue to make the case for tolling.”
“The conversations we had were thoughtful, informative, and effective. We need to continue to educate people one by one. We need to continue to make the case for tolling.”
Make the Most of Your Hill Meetings
by Mark Compton
Mark Compton is CEO of the Pennsylvania Turnpike Commission and a member of IBTTA’s Board of
Directors. Drawing on his experience meeting with legislators and staffers over the years, he has some advice for first-‐time visitors.
When meeting with staffers, the first thing you do is gauge how much they know about your industry and its policy issues. Staffers have a lot of responsibilities. Some will know next-‐to-‐nothing about tolling.
Others will be surprisingly well informed.
With the less knowledgeable staffers, you want to keep your message basic. Remember that you’re introducing them to the subject. This might be their first exposure to the issues. Most importantly, you want them to know that you or someone at IBTTA is a resource when they have questions.
With senior staff, it’s okay to deliver a more detailed message. In fact, tell them exactly how you’re hoping they can help. In general, they want to do whatever they can to support constituents. To do that, they have to know exactly what you need help with.
Likewise, don’t be shy asking about legislation that’s important to you. On my Hill visits during the
Washington Briefing, I asked each staffer whether they thought a long-‐term transportation bill was in the cards. If you’ve never been to the Hill, you might be surprised at how forthcoming their answers are.
Talking to staffers face-‐to-‐face is a completely different experience from reading about a bill in the news.
More advice: I find it always helps to ask what you can do for them. If they’re looking for an opportunity to meet and mingle with constituents, we invite them to visit our facilities and meet with our employees. They appreciate the offer, and it shows a willingness on your part to have a relationship.
Finally, it’s best to think long-‐term and be patient. The legislative process can be slow. Circle back often with the contacts you’ve made, and do your best to keep those lines of communication open.
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IBTTA PARTNER PERSPECTIVES
The Head of AASHTO on Infrastructure Funding
Some congressional legislators entertain the idea of devolving responsibility for infrastructure back to the states, but that would be a mistake, said Bud Wright, executive director of the American Association of State Highway and Transportation Officials. “There isn’t any question that the federal role in providing surface transportation infrastructure is substantial. It always has been, and it always will be,” he said. “The fact that the states are acting on their own isn’t a replacement for what needs to happen on the federal level.”
As Congress considers reauthorization of MAP-‐21, funding is the primary issue. Even a substantial increase in the gas tax would only be enough to maintain current funding. So it will be a challenge to find a long-‐term solution, said Wright. Repatriation of corporate earnings may be a temporary solution, but it’s unsustainable in the long run. “What are the objectives that AASHTO is trying to achieve during this legislative cycle? A long-‐term bill is ideal, but if not a long-‐term deal, then as long a term as possible,” said Wright.
Wright also pointed out that even if Congress finances infrastructure investment at some point, it may be too late. States need time to ramp up projects, and the longer Congress waits to act, the more states are putting those projects off. “More and more states are going to join the ranks of ‘here are projects we would have done but without certainty, we can’t move forward,’” said Wright. “I think it’s rippling out in a way that’s not understood by Congress.”
APTA Supports Funding Increase
The American Public Transportation Association agrees that Congress should pass a long-‐term surface transportation bill. The entire transportation system is broken, said Petra Mollet, chief of staff at APTA.
APTA is asking Congress for a six-‐year bill and a funding increase on the transit side from $11 billion to
$22 billion. Mollet added that the organization supported growth for the entire program, emphasizing that transportation is a system that can’t be approached piece-‐by-‐piece. The nation’s competitiveness depends on it. “There’s no country in the world that doesn’t contribute public funds to infrastructure.
No business model exists for an entirely private sector investment in public infrastructure,” she said.
APTA has no set policy on dedicated bus lanes, but Mollet pointed out that bus rapid transit works better when it’s on dedicated roads or shared limited-‐use routes.
THOUGHTS ON TRANSPORTATION AND TECHNOLOGY
Moving Toward Intelligent Mobility
For the first time in history, we see a huge influx of outside parties entering the transportation industry, said Andy Palanisamy, principal communications and senior transportation project manager at Leidos.
Specifically, technology oriented innovators are driving the industry toward a new future, characterized by connectivity and automation.
Vehicles with collision warnings are an example of connectivity already deployed on the road. Fully automated vehicles are not too far from being deployed as well, as companies like Google are actively testing prototypes. The biggest obstacle is reducing the cost of the technology, said Palanisamy.
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Palanisamy spoke on other emerging technologies that will affect transportation. A significant one is the rise of car-‐sharing services like Uber and Lyft. There are 23 services accounting for 1.3 million members.
“One car-‐sharing vehicle replaces 9 to 13 vehicles among car-‐sharing members, because their vehicles were sold or they postponed purchasing vehicles,” said Palanisamy. “This is going to have a tremendous impact in the next couple years.”
Plan Ahead, But Not Too Far Ahead
Technological advancements are evolving at such a quick pace, the worst thing a tolling operator can do is chase after whatever is new. “Make decisions that allow you to deploy technology that you can use for the next five years,” said Shiraz Hasan, area vice president for industrial IoT solutions business development for AT&T. Any longer timeframe, and it’s too difficult to imagine what capabilities will be available.
Hasan spoke on how the Internet of Things (IoT) is transforming industries, including the banking, insurance and retail sectors.
The ‘connected car’ phenomenon is also utilizing IoT technology to analyze vehicle performance and predictive maintenance. Retailers are also interested in closing the loop between you, them and your vehicle. For example, a grocery store chain is considering an app that allows customers to order groceries, and then pick them up curbside at the store.
Bet on Tech to Improve the Customer Experience
Anti-‐tolling sentiment is fueled largely by the myth that un-‐tolled roads are ‘free’ and that tolling is a form of double taxation. The movement against tolling is particularly strong in Texas, where the legislature is considering more than 50 anti-‐tolling bills, said Thomas Bamonte, Assistant Executive
Director of Strategy & Innovation of the North Texas Tollway Authority.
It’s not only the myths about tolling that feed resistance. The customer experience also matters, and right now, the industry’s product isn’t compelling enough to overcome anti-‐tolling sentiment, said
Bamonte. Errors in billing and confusion about whether slow-‐paying users are customers, potential customers or bad customers also contribute to a lackluster experience. Regarding customer service, the more interactions a customer needs to do business, the more frustrated they get.
Emerging technology offers the industry opportunities to improve the customer experience. “We may find investing in technology is much more bang for the buck than investing in new concrete,” said
Bamonte. He offered examples of how technology could have an impact. As payment systems improve, agencies can minimize the number of interactions needed to do business, for instance. In the future, users could pay through new channels, including text, smartphone app or in-‐vehicle system.
Automated vehicles also have potential to transform the riding experience. They would free consumer time and contribute to smoother traffic flows, said Bamonte. In effect, they could create greater carrying capacity on existing roads, leading to an increased revenue potential.
Congestion pricing and revenue maximization is another way that technology has an impact. Right now, customers are undifferentiated, but data mining tools will reveal more information about user behavior.
It may be possible in the future to toll by person rather than vehicle. Instead of making everyone pay the same price, it could be based on a variety of factors. “We can do it customer by customer using big data rather than have across-‐the-‐board blunt tools,” said Bamonte.
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