Odometer-Based Road Usage Charging

Odometer-Based Road Usage Charging
Offering odometer-based road usage charging (RUC) can support a successful transition away from the fuel tax.

Most RUC programs and pilots in the U.S. to date have focused on automated solutions; specif­i­cally, on-board diagnostics (OBD-II) plug-in devices for passenger cars and trucks. These devices provide a rich set of data, requiring users to simply keep the device plugged into their vehicle. The advantages to the agency imple­ment­ing RUC are ease of use by customers and high compliance rates, along with the ability to offer automated discounts for miles driven of road and out of state for customers who choose devices with GPS.


However, there are some drawbacks to a device-based approach. Devices must be mailed to users for them to self-install promptly, and devices must be replaced as cellular technology continues to evolve. Some motorists may be uncom­fort­able installing devices into their vehicles, even devices that have no ability to detect their location. And the devices can be costly, as much as $50 up front and at least several dollars per month to use.


Automaker telematics is another promising option that may provide an excellent solution for mileage reporting, but it is not yet mature or cost-effective enough for widespread imple­men­ta­tion. Access to telematics data is currently available through third party interfaces, and automakers control the frequency of data avail­abil­ity, for example once per hour. With the additional cost of as much as several dollars per vehicle per month, telematics is not substan­tially cheaper than using devices. Although most vehicles are equipped with telematics, many lack an active subscrip­tion, which may hinder widespread avail­abil­ity for mileage reporting in the near term.

With all this in mind, a strong alternative is odometer-based RUC. Odometer-based RUC collects data using existing odometer reading events such as safety inspections, vehicle owner self-reported data, or technology such as image capture appli­ca­tions on mobile devices. This requires little effort from users, only needing to enter in a number at least once per year. We’ve seen success with this approach in the field: safety inspection-based RUC has been demon­strated in the recent Hawaii RUC pilot. Odometer-based methods are low cost, low impact, and have received higher degrees of user acceptance due to ease of use.

Odometer-based RUC does not, however, offer the ability to exempt miles. For states that wish to offer exemptions for miles driven out of state, one simple alternative is to offer a “standard deduction” of exempt miles to all drivers. Another is to offer a manual process for drivers to demonstrate their exempt miles. Alter­na­tively, odometer-based RUC can be paired with technology options, by offering the option of using an approved device to report exempt miles auto­mat­i­cally for those willing to pay for the cost of the device.

There are multiple strategies for tran­si­tion­ing toward odometer-based RUC. For example:

  • States with odometer collection for emissions inspection can offer the use of that data for RUC collection; this would cover at least a portion of vehicles, in some states a large majority.
  • Odometer readings can be requested at the time of regis­tra­tion renewal, with a fee collected based on miles reported.
  • Odometer based RUC can be introduced at the same time as automated RUC, and those individuals who wish to pay for automated RUC collection can choose to do so.

Odometer based RUC complements some other approaches for tran­si­tion­ing to RUC:

  • It can be introduced to new vehicles first. Over time, more vehicles will begin to pay RUC without over­whelm­ing existing processes and systems with a sudden change.
  • RUC can be introduced at the same time as the fuel tax is increased as an opt-in, with the RUC rate set based on the previous fuel tax rate, so that people who choose to pay the RUC are effectively locking in the previous fuel tax rate.

Odometer reporting offers a low-cost pathway for states interested in fair, sustainable funding through RUC. The benefits are clear, and yet it does not have to constitute an entire solution by itself. One size does not fit all: odometer reporting can be paired with advanced tech­nolo­gies to offer customers an array of choices for how to pay for road use.

Ging Ging Fernandez Ging Ging Fernandez
I love that feeling when a plan comes together just so and you know that you’ve arrived at a solution where all the pieces fit.

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