The evolving tolling landscape

The techniques used to levy tolls on roads, bridges, and tunnels have changed dramatically in the last 30 years. With new technologies that permit traffic to flow freely as toll authorities collect payments digitally, current roadways should be at peak efficiency. Yet current estimates indicate that US toll authorities are unable to collect at least $2.24 billion annually due to various breakdowns in the collection process.

The electronic revolution in tolling

For centuries, governments have used toll revenue to fund both new roadway construction and the maintenance of existing infrastructure. Tolling entered the computer age in 1989 with the introduction of electronic toll collection (ETC) on the Dallas North Tollway, an advancement that increased operational efficiency and largely eliminated the need for cash transactions.

In the years since, ETC has become the dominant method of toll collection in the United States.

In the 1990s, the introduction of transponder-based tolling paved the way for gateless, free-flow lanes that allow ETC transactions to be captured at highway speeds. In 1993, the Oklahoma Turnpike and Georgia’s State Road and Tollway Authority both introduced the nation’s first purpose-built free-flow tolling systems, commonly called open-road tolling (ORT).

ORT allows the customer to pay automatically via a transponder without having to stop. This eliminates the need for toll booths altogether, allowing vehicles to pass under toll plazas at high speeds while their payment and vehicle information is captured and improving safety since vehicles don’t need to slow down. While ORT is highly efficient, safer, and widely embraced by the public, it also creates opportunities for revenue loss: Of $20.24 billion in revenue owed to toll authorities each year, about $2.24 billion goes uncollected due to ineffective account conversion processes and paper-based invoicing.

Today, toll authorities collect payments primarily through three different methods: transponders, “toll by plate,” and third-party vendor systems (often used through mobile apps).

Better electronic tolling

It’s easier to attract customers by making payment as seamless and accurate as possible. More options for paying tolls can reduce reliance on toll by plate and its related paper bills.

Behavioral economics says consumers are more likely to make payments when doing so is easy. With time and appropriate investment in IT infrastructure, a free market of user-friendly, third-party payment options will emerge, all of them able to handle transactions for any toll facility. As these alternative payment options enter the market and begin to scale, a “middleware” layer will be required to connect data and payments arriving from third parties with tolling authority systems. Features such as data processing, standard application programming interfaces, and near-real-time ledgers will streamline back-end processes and allow toll authorities to integrate with third parties in a seamless, cost-efficient manner.

With streamlined access to new payment options and better customer data, tolling authorities will spend less time and money chasing down customers and should be able to reduce reliance on the toll-by-plate process.

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