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Applying international lessons learned to U.S.-based RUC systems 

International road-usage charging (RUC) expert Scott Wilson shares solutions he's discovered for the most common RUC challenges and advice for how states can learn from their foreign counterparts.

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While RUC and its benefits are familiar to many trans­porta­tion leaders in the United States, few know that the concept’s origins began abroad. New Zealand, for example, has collected RUC from heavy- and medium-duty vehicles, plus diesel cars since 1977, and many European countries have implemented time- and/or distance-based RUC largely for medium- and heavy-duty vehicles.

Thanks to a longer history and varied execution strategies, these inter­na­tional adopters can teach valuable lessons about how to implement successful RUC programs stateside. Scott Wilson, a New Zealand-born client service leader with CDM Smith has worked with clients in New Zealand, Australia, the UK, USA, Ireland, the Middle East and Hong Kong, as well as the European Commission. He specializes in advising on strategy, policy, regulation, and governance for road pricing and tolling.

Here, Scott shares solutions he's discovered for the most common RUC challenges, and advice for how states can learn from their inter­na­tional RUC coun­ter­parts.

When introducing and imple­ment­ing RUC abroad, what are some of the key challenges facing clients, and how can they be overcome? 

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Challenge

Public opposition
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Scott Wilson

Resistance to change is a global phenomenon, and one that affects potential RUC juris­dic­tions everywhere. If you’re thinking about adopting a RUC system, partic­u­larly in the early stages, be sure to clearly communicate the concept and major objectives. It’s important to stress that RUC is a means to replace—not add to—revenue from existing taxes. You might consider a demon­stra­tion or pilot to help allay any fears and answer key public concerns.
White dart hitting bullseye on blue background.

Challenge 

Conflicting objectives
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Scott Wilson 

Is RUC about raising adequate revenue to fund road maintenance or managing demand? Often these two objectives are in conflict, and attempting to address both can raise costs and stoke public opposition. Direct and consistent commu­ni­ca­tion will help the intro­duc­tion and rollout of a RUC program, and the public tends to support RUC schemes that lead with fairness as a key objective. Most successful RUC programs globally focus on revenue: user fees aim to generate adequate revenue to address road infra­struc­ture needs across a large juris­dic­tion such as a state, region, or country. To manage demand, congestion pricing is a separate consid­er­a­tion more appropriate for targeted local application in urban areas.
White dart hitting bullseye on blue background.

Challenge

Letting the technology lead the solution 
Person in a pinstripe suit with a patterned tie under a bridge.

Scott Wilson 

Exhaustive arguments can be made for (or against) each of the technology options available to capture and report road usage. It’s easy to be swayed by the flashiest option. But in reality, you’ll want to include a variety of high- and low-tech options to ensure all vehicle operators can partake in the program, regardless of their needs or the type/age of their vehicle. Drivers also like choice, which improves acceptance of something new and unfamiliar. The bottom line? Don’t be dazzled by devices.
White dart hitting bullseye on blue background.

Challenge

High admin­is­tra­tion costs
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Scott Wilson 

Some mature RUC systems see admin­is­tra­tive costs below 5% of revenue. Economies of scale are real, but you’ll want to remind the public that it may take a few years to reach that level of efficiency.
White dart hitting bullseye on blue background.

Challenge

Dealing with various classes of vehicles
Person in a pinstripe suit with a patterned tie under a bridge.

Scott Wilson 

Much of our work abroad deals with heavy-vehicle RUC. Indeed, much of Europe and New Zealand rely on tolling and distance-based charges from medium- and heavy-duty vehicles to fund their road networks. Australia is studying such a program through a national trial. While rare in the U.S., experience abroad points to key success factors including fiscal reforms that optimize funding of infra­struc­ture projects for the benefit of freight intensive industries; fair rate-setting method­olo­gies carefully devised to allocate costs to road users based on their impacts; consol­i­dat­ing and simplifying tax burdens on businesses; and thoughtful admin­is­tra­tion designed to maximize compliance while minimizing costs for operators.
White dart hitting bullseye on blue background.

Challenge

Rate and revenue concerns
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Scott Wilson 

Thanks to inherent skepticism of politicians and poli­cy­mak­ers, many potential RUC end-users don’t trust government officials to set rates fairly. This is especially contentious with RUC systems, as the basis for setting per-mile rates is not obvious. Clear principles should guide how rates are set including consid­er­a­tions for medium and heavy-duty vehicles by weight and config­u­ra­tion. 
White dart hitting bullseye on blue background.

Challenge

Belief that RUC will hurt the transition to EVs
Person in a pinstripe suit with a patterned tie under a bridge.

Scott Wilson 

There is no evidence of noticeable negative impacts on EV adoption in juris­dic­tions with RUC. In fact, EVs are still cheaper to operate with a RUC system than internal combustion engine vehicles. For European juris­dic­tions, the transition to EVs is well underway with or without RUC, in many cases with mandatory adoption timelines within 15 years. These transitions are putting pressure on governments to find replacement revenue sources such as RUC. Besides clearing up this confusion, it is useful to provide additional information on the issues that actually do hinder EV adoption, such as high upfront costs, range anxiety, and vehicle model choice. In addition, motorists and businesses alike need to trust that when a ‘user pays’ principle is applied the money is actually spent on the roads. 

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Scott Wilson

Project Manager

Scott s expertise spans road pricing, tolling, transportation and aviation strategy, international policy and telecom regulation.

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