The current financial structure of the transportation system is based heavily on the gas tax. With electrification of the transportation fleet, the gas tax is under attack. Toll roads or lanes provide a revenue source, but the scope is limited. The current funding and usage model for the transportation system needs some reevaluation.

From an economic point of view, civil infrastructure operates largely with the assumption that the consumer of transportation has zero cost access. With no market cost model, there is no way to match demand and supply, nor any method to build market-based optimization. This leads to inefficiencies in the system demonstrated by points of shortages (congestion) and oversupply (empty streets at 3 a.m.). 

“Today, transportation engineers are asked to optimize the transportation system, so every participant experiences few delays, and the costs of the overall infrastructure are minimized. The tools of the trade include road design, signage and traffic light management. Because of the variable compliance by all human drivers, the level of control is very poor. With the advent of the electronic technology revolution, many powerful tools are becoming available to transportation engineers,” said Ananth Prasad, former Florida Secretary of Transportation. 

Interestingly, key technologies are coming online which can allow for a radical revamp of the operate the transportation system. These include:  

  1. Point-to-Point Trip Information: Mapping applications such as Waze, Apple Maps and Google Maps contain end-to-end information on consumer trips. This level of information has not been traditionally available to civil authorities. Instead, civil authorities rely on measured traffic density on road segments.
  2. Vehicle-to-Vehicle (V2V) and Vehicle-to-Infrastructure (V2I) Communication: V2V and V2I communication have been traditionally conceived with a focus on safety. However, another, perhaps more interesting, application is communication for the purposes of traffic management using concepts such as micro-tolling.
  3. Smart Infrastructure: Traffic systems that are cloud-connected can enable controls that can further optimize traffic flow dynamically. 
  4. Fleet Creation: With the advent of cellular and ad hoc connectivity, individual drivers are becoming part of fleets. Fleets include trucking companies, shared mobility companies (Uber) and public services (police, fire, FDOT).

The underlying electronics infrastructure enables quite interesting top-down economic and engagement models. Some innovative examples of micro-tolling business models include:

  1. Latency Minimization: Mary needs to urgently get to her job interview.  Through a mobile app, she indicates her economic desire and an amount she is willing to pay. Through V2V communications, her car pays cars ahead of her to give her right of way. Through V2I communications, smart traffic lighting systems favor Mary’s route and create an additional source of tax income. 
  2. Bandwidth Optimization: Judy, the traffic engineer, manages a very important road segment. She knows that traffic can flow smoothly to a certain level of congestion, but after that point the road’s efficiency drops rapidly. As the density rises, Judy releases credits available to a network of people who get paid to use alternate routes.
  3. Reverse Metering: Alvin is a retiree. He wants to go shopping but doesn’t care when he goes. He registers his desire to shop within a certain timeframe and his app tells him the best time to go. Sometimes he can even earn credits for going at certain low-volume traffic times.
  4. Transportation Business Planning: Fred runs the Department of Transportation operations that decide where to invest precious resources to expand or build new infrastructure. In the old days, he would look at traffic congestion snapshots and projections of future growth. Now, he not only has the data for whole trips, but also the economic impact of each trip. With this information, he can make a sound economic argument for expansion, and the return on investment can be modeled directly. Given the direct connection to expected revenue, Fred can much more easily justify projects.
  5. Commercial Applications: Elaine runs a commercial trucking company. For her ecommerce customers, time is really important, and they will pay for it. For those trips, she allows her drivers to pay additional tolls through the micro-tolling infrastructure. For her non-ecommerce customers, timing is not as important as long as the freight get there in time (e.g.,soft drinks, dry goods). Also, those customers are very focused on cost. For those trips, she moves the freight to off-peak times, when the cost of the infrastructure is low. In addition, with the use of ADAS technology, her trucks drivers can overcome some of the safety concerns of driving in the early morning.
  6. Emergency Vehicles: Danny is an EMT. In the past, getting to the hospital was tricky as he tried to navigate traffic signals that were against him. Now, when he turns on his siren, the traffic lights automatically change in his favor and the cars ahead of him give him the right-of-way.

The use of micro-tolling and an emerging electronics infrastructure can enable dramatic optimizations.  Overall, the combination creates a transportation system which can be much more responsive and adaptive while maintaining reasonable costs. 

Note: A deeper examination of the economic models for AV exists in a Society of Automotive Engineers (SAE) report which can be found at SAE Mobius.



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