{"id":20670,"date":"2016-11-18T17:59:12","date_gmt":"2016-11-18T22:59:12","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/electronic-toll-systems-connectivity-convenience-and-collections\/"},"modified":"2016-11-18T18:01:19","modified_gmt":"2016-11-18T23:01:19","slug":"electronic-toll-systems-connectivity-convenience-and-collections","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/electronic-toll-systems-connectivity-convenience-and-collections\/","title":{"rendered":"Electronic Toll Systems: Connectivity, Convenience, and . . . Collections?"},"content":{"rendered":"

On October 28, 2016, Massachusetts Department of Transportation (MassDOT) toll collectors worked their final day in toll booths, marking the conclusion of almost thirty years of digital transformation in the Massachusetts toll industry.[1]<\/a> \u00a0The elimination of toll booths in favor of electronic toll collections (ETC) created value for both driver and MassDOT.\u00a0 Drivers benefited from improved convenience, the elimination of toll-related traffic and wait times, and reduced traffic congestion.\u00a0 However, digital transformation introduced new challenges to MassDOT\u2019s business and operating models that require vision and future investment to resolve.<\/p>\n

By building highways, tunnels, and bridges across the state, MassDOT\u2019s business model provided drivers with unmatched personal mobility by automobile, bus, or motorcycle at little cost. \u00a0MassDOT created significant value for its constituents.\u00a0 MassDOT financed infrastructure projects with bonds, with toll revenues collected to pay bond interest and operating expenses.\u00a0 Fulfilling the MassDOT\u2019s promise to consumers\u2014convenience, speed of travel, and safety to many other communities\u2014meant purchasing construction equipment to maintain the Pike, weather equipment to keep the roads open in winter, and compensating a large work force to man both toll booths and equipment.\u00a0 MassDOT utilized a labor-intensive process where drivers stopped to pay tolls in cash, which MassDOT employees later transported to secure holding facilities.<\/p>\n

In the mid-1980s, technology advances led toll authorities to research ETC, which reduced the cost to operate toll roads by eliminating the labor required to collect tolls manually. \u00a0In order to track and bill drivers, the toll authority issued an active radio frequency identification (RFID) transponder with a unique signature to each driver.\u00a0 Sensors installed at road entrances detected the entrance and\/or exit of drivers and stored the time and distance data, which was used to calculate rates and bill drivers.\u00a0 Another advance made ETC possible: network connectivity.\u00a0 Sonnet fiber optic cable, laid along highways, created networks allowing RFID sensors to communicate with data centers that could monitor and bill customers in real time.[2]<\/a>\u00a0 The proliferation of credit cards later allowed ETC authorities to charge customers directly for payment, substantially reducing the storage, labor, and transportation costs of handling cash.\u00a0 ETC was proven in Europe and some U.S. states, and was subsequently adopted by MassDOT in 1998 as the \u201cMassPass\u201d (later renamed \u201cFast Lane\u201d and \u201cE-ZPass\u201d) program.[3]<\/a><\/p>\n

Instead of having to stop at a toll booth, consuming time and often creating traffic backups, at full utilization, ETC saved drivers more than 800 hours of time every day, or 280,000 hours per year.[4]<\/a> The reduction in traffic and congestion also saved drivers up to 875,000 gallons of gasoline per year.[5]<\/a>\u00a0 MassDOT later decided to eliminate cash toll booths entirely by 2016 by installing new gantry-mounted RFID sensors and cameras.[6]<\/a>\u00a0 Instead of employing toll collectors, motion-activated cameras took photos of vehicle license plates.\u00a0 License plates corresponding to those vehicles without RFID transponders were tracked to addresses provided at vehicle registration, and bills for the tolls due were mailed to those addresses.<\/p>\n

Although RFID, fiber optic, and internet technology revolutionized MassDOT\u2019s toll system, they introduced new challenges.\u00a0 First, they required a large upfront capital expenditure.\u00a0 Second, the elimination of the labor force in a slow growing state economy was publicly controversial.[7]<\/a>\u00a0 Third, government collection and storage of driver location information and pattern of life was also controversial due to privacy concerns, and facilitating cash toll collections provided an \u201copt-out\u201d mechanism for concerned drivers.\u00a0 Lastly, ETC introduced higher risk of fraud; RFID transponders and license plates alike could be stolen.[8]<\/a>\u00a0 Although ETC introduced noticeable cost savings, it increased mailing costs for drivers who had to be manually billed and led to both debt collection and bad debt expenses that were previously minimal or nonexistent.<\/p>\n

In order to overcome these challenges, MassDOT must consider technology and the future.\u00a0 First, instead of relying on the current 16-state E-ZPass Interagency Group and registration databases to bill out-of-state drivers, it should seek to expand the interagency group to all states and territories.\u00a0 Second, and most importantly, MassDOT must invest in the next generation of technology that can tie toll bills to individual drivers rather than RFID transponders or license plates.\u00a0 To do this, MassDOT should utilize the existing technology platform that almost all drivers possess\u2014mobile devices.\u00a0 Transponders built into devices or cellular and Bluetooth signals could replace RFID, and mobile applications could be used to identify drivers versus passengers.\u00a0 Devices also offer significantly more security than simple transponders, which have no protections.<\/p>\n

\u00a0<\/em><\/p>\n

(800 words)<\/p>\n

[1]<\/a> Nicole Dungca, \u201cCollectors Pay a Fond Farewell to Mass. Pike Tollbooths,\u201d Boston Globe<\/em>, October 29, 2016, https:\/\/www.bostonglobe.com\/metro\/2016\/10\/28\/tolls\/IyHxV3TlC1hFMT25pYBIfL\/story.html<\/a>, accessed November 2016.<\/p>\n

[2]<\/a> Don Flint, \u201cElectronic Toll Collection,\u201d SANS Institute, April 27, 2004, p. 6, https:\/\/www.sans.org\/reading-room\/whitepapers\/threats\/electronic-toll-collection-1424<\/a>, accessed November 2016.<\/p>\n

[3]<\/a> Economic Development Research Group, Inc., \u201cEconomic Impact of the Massachusetts Turnpike Authority & Related Projects,\u201d February 2006, p. 8, http:\/\/www.edrgroup.com\/pdf\/mta-economic-v1.pdf<\/a>, accessed November 2016.<\/p>\n

[4]<\/a> EZDriveMA, Massachusetts Department of Transportation, https:\/\/www.ezdrivema.com\/AboutEZDriveMA<\/a>, accessed November 2016.<\/p>\n

[5]<\/a> Ibid.<\/p>\n

[6]<\/a> EZDriveMA, supra note 5.<\/p>\n

[7]<\/a> Dungca, supra note 1.<\/p>\n

[8]<\/a> http:\/\/wjla.com\/features\/7-on-your-side\/new-ez-pass-scam-costs-local-business-for-52000<\/p>\n","protected":false},"excerpt":{"rendered":"

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