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Tolling Points

Could Mobile Apps Designed for Retail Payments be Applied for Toll Interoperability?

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Guest Post: By Rich Bastan, Vice President, Xerox State & Local Solutions, Inc.

While tolling technology has evolved over the last 20 years, and regional standards have involved for interoperability, there is not a national standard. Because of this, there is a federal mandate in place for national toll interoperability by 2016 – allowing toll customers to travel seamlessly anywhere in the country. IBTTA has made significant progress developing a national protocol and testing is expected to begin in 2015.  

Mobile payment capabilities will be a key factor in moving seamless interoperability forward. Think Starbucks: there is a mobile app for the national coffee chain that you can use for any Starbucks in the country. It charges whatever consumers buy against their account. Tolling with this kind of interoperability is likely more than two short years away, but eventually the same kind of process will happen.

How Far the Tolling Industry Has Come
Few services in the United States have grown as steadily as electronic tolling. In the last decade:

Annual tolling revenues have more than doubled to reach $13 billion – largely driven by the popularity of electronic tolling.

Nineteen new toll agencies have formed.

There has been a significant move toward DOTs becoming tolling agencies to utilize tolling operations as a broader funding source. Seventeen DOTs across the U.S. are currently doing this.

Total mileage on tolled highways has increased by 11 percent.

Cashless tolling has raised revenue for highways and bridges, cut down on traffic congestion and greenhouse gas emissions, and allowed motorists to drive long distances without stopping or slowing down.

What’s Standing in the Way of Future Growth?
Despite the tolling industry’s steady rate of growth, meeting the federal 2016 deadline won’t be easy. In order to achieve interoperability across regions, national protocol standards are being developed to accommodate the different manufacturers that have built the equipment and the states that have adopted it. Technology will need to be tweaked to make the transponders and lane equipment compatible across regions and tolling agencies. And there’s the issue of how the credit card fees and billions of dollars in revenue will be shared by states. Also, transactions from visiting drivers must be reconciled, either by settling with the home agency, or by obtaining the visiting driver’s account information and sending a bill directly. Further, agencies that have sunk a significant amount of cost into their existing tolling technology may incur meaningful unexpected costs to make the change to comply with a national protocol.

So, if we’re not quite at the stage where pay-by-smartphone is the reality of tomorrow, what solutions are we looking at in 2016?

Statewide and regional interoperable groups, like E-ZPass’ 26  tolling agencies in 15 states that support its use, are furthering the outsourcing of the design and operation of customer service centers that consolidate services for multiple agencies. These regional centers represent the next phase in electronic tolling’s evolution. Capable of providing front-end delivery and equipped with advanced back-office systems, these centers achieve efficient processing by allowing several agencies to share resources.

This is not necessarily a long-term solution, and because of the payment challenges noted above, we should focus on alternate payment mechanisms, like an app on your smartphone or something built in the automobile itself that will allow drivers to pay as they pass through any toll plazas.

A future solution to the interoperability dilemma won’t be found overnight, or even by 2016, but the movement toward mobile devices will help tolling agencies find efficiency through consolidation. We’re interested in hearing what you think: what could be the solution to toll interoperability? Please leave a comment and/or continue the discussion on Twitter @XeroxTransport.

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