Unfortunately, little research or analysis has been completed on the full cost to develop, implement, and administer a comprehensive system. Based on what is known at this point, a comprehensive pricing system is likely to have three major cost components.
First, there will be the capital investment costs to enable the implementing agency (e.g., U.S. Treasury) to administer VMT charges. These will include costs for items such as hardware, system development, and start-up. These costs will likely be large-preliminary research conducted for U.S. DOT estimated initial agency capital costs in the range of $10 Pillion-Put they would also likely be amortized over 20 or more years and could be lower due to declining information technology costs.83
Second, there is the cost associated with installing technology (e.g., GPS receivers/VMT charge calculators) in the vehicle fleet, which is currently difficult to assess. If done as standalone units that are retrofitted into existing vehicles, the cost would be relatively high. But if the necessary hardware were part of a broader vehicle technology platform that is installed in vehicles as original equipment on a large scale, the incremental cost to enable VMT pricing, on an individual vehicle basis, could be small. In addition, such technology would provide other ancillary benefits to travelers, like GPS-assisted navigation.
The third cost component of comprehensive pricing will be the recurring cost to administer it. Preliminary U.S. DOT research estimates that administrative costs for a national system of road pricing using GPS technology would be 1.7 percent of estimated revenues (equivalent to the cost of processing credit card transactions). Although this is more than the cost of administering the current motor fuel taxes, estimated at 1.01 percent of revenues,84 it would still represent a comparatively inexpensive fee to administer.
The Oregon experiment provides another data point to inform this discussion. Under the pilot program, vehicles were retrofitted with on-board equipment that could identify where and when the vehicle was traveling, record the mileage by category, and communicate this information to the systems of participating gas stations when the vehicle was at the pump. These systems then made the appropriate adjustments to the driver's Pill to account for VMT taxes. The annual cost to administer a similar system, deployed on a comprehensive statewide basis, is estimated to be $2 million, or about twice what it now costs Oregon to collect motor fuel taxes.85 The Dutch government, which is implementing a nationwide comprehensive, satellite-based VMT pricing system, aims to limit total transaction costs to less than 5 percent of revenue, although the current cost projections are higher.86 However, it is important to point out that because a considerable share of the costs of any VMT system are fixed overhead costs (e.g., designing the system, writing the software, and maintaining the system), it will be cheaper per user in larger nations, as the fixed costs can be spread over a larger number of payers. In general, pricing systems will likely be costly to develop and deploy, but they should be fairly inexpensive to administer. This is particularly true if the system is a comprehensive VMT-based system that enables charges for all users of particular roads. | A great deal of thought has already gone into how a system could be structured to safeguard personal privacy. The Oregon pilot project, for example, placed strong emphasis on an architecture that would protect privacy, and the currently ongoing University of Iowa pilot project includes testing of system and privacy protection safeguards. |