Showing posts with label congestion pricing. Show all posts
Showing posts with label congestion pricing. Show all posts

Monday, May 17, 2010

Brilliant Strategy for Transition to Road User Fees

Everybody in transportation knows that we need to move from a gas tax to a road user fee in order to finance transportation infrastructure. Regular people – that is, everybody else – hate this idea and doesn’t get it. A colleague has come up with what I think is a genius political approach that I describe in the second half of this post. The first half describes the problem.

This is what the public says:

I’m already paying for the roads through my taxes. [Actually, you are paying with 18 year old prices since the fuel tax hasn’t been changed in that long. In the meantime, the costs have increased enormously. And compared to the price and volatility of the gas itself, the taxes are not that significant a percentage. ]

It works great. Why touch it? If the amount of money raised is the problem, just raise the tax. [Well, 1) you can’t just raise the tax, which is why it hasn’t happened in 18 years even though we are experiencing a crisis in our transportation infrastructure which is crumbling and ancient. If you’re lucky enough to do any traveling to Europe, you’ll note that our airports, train stations, trains, roads, and sidewalks are so much worse than what you see there. We are looking like the poor, ragged cousin. And if the fuel tax is broken as a means of raising money, as we move to more fuel efficient vehicles and alternative fuels, it will get increasingly broken.]

Paying by the mile is an unfair and regressive as a tax. What about the miles I drive out of state or on private roads? What about poor people? [Today’s gas tax has all those same problems. Some of the road user fee implementations could correct some of those problems.]

What about my privacy? I don’t want the government to know my every move. [Good point, read this that I wrote earlier]

THE SOLUTION. Here is a strategy that can get political buy-in and offer us a transitional path toward adopting road user fees. I’m thinking it is pretty clever and viable.
Put together a working group of legislators and outside stakeholders to discuss how we pro-actively address the impending transition to electric vehicles. Here is how the logic can proceed:

1. Everyone is willing to agree that EVs should pay their fair share, and that the gas tax system let's them off the hook.

2. It is far better to pro-actively come up with an appropriate solution before there are lots of them. With the tax expectation in place, people can buy EVs with full knowledge, rather than government trying to change the rules after this has become a significant market with a significant constituency.

3. The bill itself should be lightly worded. Owners of electric vehicles need to pay for miles driven within the state according to some referred-to rate plan (which definitely needs to adjust with inflation). The simplest means would be an odometer reading at time of inspection. Other mechanisms that result in the appropriate payment, as approved by the state, would also be allowed.

4. To be fair, any driver/vehicle can choose to opt in to this new method of road user fees, instead of paying gas taxes.

We have a platform for experimentation on this new payment method, and working it through the entire system with low volumes. We start with the lowest common denominator for payment (odometer reading) that side steps privacy and technology concerns. However, other technology solutions could come online and be approved by the state (payment with GPS using smart phones, or with other in-vehicle devices – those built in to the car or those retrofitted on existing vehicles). Having multiple payment options will ultimately provide consumers with an array of choices that many people will find more appealing. Some solutions will address the privacy issues. Some will be able to track out-of-state versus in-state miles. Just about every other option could be a preferred choice over the crude odometer reading because it will reduce the distance taxed. As time goes on, there would likely be all sorts of methods for payment and collecting of the data that use a wide range of devices, evolve over time, and take the burden of devices and refreshing them away from the state.

That is the gist. I think it is a brilliant strategy that should have few detractors now, gives a slow easy opportunity for working the new payment mechanism through the collections systems, and opens up the path for any kind of vehicle, to opt into the system.

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Monday, March 1, 2010

Is the gas tax a user fee?

Here is my answer for the National Journal Transportation Blog.

"User pays" was the foundational concept and an interesting one to reflect on. The question notes that current gas taxes inadequately cover even simple maintenance requirements on existing roads, yet the phrase resonates strongly with drivers. They sincerely believe that they have paid for all that is required with their gas taxes at the pump.

If the road user really paid what driving costs to maintain, what driving costs to widen and build new, what driving costs in police forces, emergency personnel and equipment, lifetime effects of accident road deaths and injuries, watershed destruction, groundwater and run-off pollution, excess asthma rates, higher incidence of heart disease and negative effects for those living near highways, congestion, and CO2 emissions (etc, my list is truncated), we wouldn't be in the unfunded situation we are in today.

Also, if "user pays" included all those "externalities" (so many things in quotes), it would seem perfectly appropriate for the gas tax to include pedestrian and sidewalk improvements, mass transit, electric charging stations, and environmental remediation efforts because all of those things are attempts to mitigate the real and costly negative impacts caused by the car-driving users.

At the end of the day, if we take political realities into account, the one thing I ask for is for drivers to truly understand what their fuel tax is actually paying for, and what is quietly and covertly being subsidized by their other taxes. Because we haven't included these costs in the gas tax, we are using local, state, and government money brought in from other sources to cover the difference. When we say we don't have enough money for education, or welfare, or parks, or elderly programs, we need to recognize that this shortfall is in part because we are paying for all sorts unfunded car-related expenses with non-gas-tax dollars.

To read how other experts weigh in on this, go to the National Journal Transportation Blog.

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Tuesday, November 17, 2009

Holland first city with distance tax

The Dutch lead the way in transportation once again. They look to be the first country in the world to move from a fuel tax to a distance tax, with the cabinet presenting a plan to be voted on.

According to the story, the highpoints are "If the legislation is passed by parliament, motorists will start paying tax on every kilometer they drive" and that the "tax will be higher during the rush hour and for more polluting vehicles." Exactly right and as it should be, payment based on distance, emissions, and time of day. I've been saying for a while that movement from a gas tax to a distance tax is inevitable, and here is the start.

What interested me comes from the comment section. Unhappy people worry that it is regressive, represents double and increased taxation, is the end to their privacy, and is another step in the big brother government. These are all common concerns. A careful government presentation of the effort would dispel some of the false assumptions, and dealing head on with the privacy continues to be imperative.

I don't know whether the switch will mean higher road taxes. In the US, it should mean that. Today our transportation infrastructure is financed through gas taxes, and these haven't kept up with inflation. In fact, they remain unchanged at a national level for the last 18 years. That doesn't work! Our infrastructure is literally falling down.

The stimulus money, if well spent, would help a small amount. As a measure of the backlog of projects, we can look at the submissions for $1.5 billion in discretionary transportation projects that was in the ARRA (stimulus). The submissions from states were due September 15. The result: 1,381 applications seeking a stunning total of $56.9 billion -- 38 times the money available! It should be pretty clear that states are desperate for more money for transportation investment.

On the issue of privacy, I've blogged about how to address it many times.

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Friday, July 3, 2009

Open Platforms, Smart transportation & smart grid

Nice Treehugger podcast interview with me that explains my vision on the how and why of open platforms for cars, the connection to the smart grid, and how creating a mobile internet can become an engine for economic development. Phew, all that in 15 (?) minutes.

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Monday, March 10, 2008

Mesh Networks on Transportation: will it work?

A monthly magazine for technical types, Baseline, has a long article about me and the idea of using mesh networks in the transportation realm.

The article is well researched and interviews people across the industry. A sad omission is the lack of named attribution to Andrew Blumberg, my colleague who has done all of the work on privacy protection. The article also puts the cost of the in-car boxes too high by a factor of two.

My favorite is the closing paragraph:

“I see Robin as one of the global thought leaders of transportation technology,” Villa says.

Allies in the open-source community are hopeful.

“It’s completely doable with the technology that’s available today,” says Sascha Meinrath, research director for the Wireless Future Program at The New America Foundation, a Washington public policy institute and think tank, a leading expert on community wireless networks and a member of the Meadow Networks board.

“There’s pretty much no scalability limit and no throughput limit. We’re 80, 90 percent of the way there. It’s just a matter of finding a municipality, a company, a patron willing to fund this.”

Hey, it's my blog and I'll blog it if I want to :)

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Monday, February 4, 2008

Achieved: 17% reduction in CO2 emissions in 6 years

Who’d a thunk it? Boston’s Logan airport is as an example of good transportation practice.

Last year, Logan served virtually the same number of passengers as in 2000 (28.5 million) with an incredible 16.7 percent fewer total flights (95,000 fewer). That meant 16.7% fewer trips (miles flown and CO2 emitted), 16.7% fewer landings and take-offs bothering neighbors, and a heck of a reduction in capital assets and costs for the same amount of mobility. All that achieved within 6 years.

What happened? Could we replicate it on the roads?

After September 11, 2001, demand for air travel plummeted. Airlines had to weigh the variable costs (fuel, incremental staffing, landing fees) against the benefits (revenue from passengers) of every flight. To reduce costs, first they cut flights, and then over time, they cut and chose new planes that had better fuel/passenger load efficiencies.

Basically, variable costs were high enough to trigger behavior change, and it was someone’s job to make sure that benefits (revenues) exceeded costs. I would guess (but don’t know) that airport infrastructure enjoys dramatically lower subsidies than road infrastructure. The cost to land and park a plane at Logan, as well as counter real estate, is probably very close to the real cost of building and operating the airport. [In fact I think Massport runs cash positive.]

The environment for the average car driver is quite different. His user fees (gas taxes, tolls, and parking) are an insignificant percent of the true costs (my google search produced numbers all over, putting the gas tax at between 50 and 5% of the real costs). His benefits aren’t easily quantified, and his real variable costs are hidden by the cloud of time. His perception is that the cost of driving is primarily gas, with the occasional toll or parking fee thrown in.

If we charged the real costs of driving – preferably per mile – our driving behavior would be dramatically different. We’d see trip reductions of 17% or better, and probably in a much shorter time period than 6 years. No doubt many more people – like the airlines – would combine trips benefits (many errands accomplished on the same trip!), would choose alternative modes where available, and would make the effort to rideshare a larger fraction of their trips (using GoLoco, of course).

Logan has another practice in place that intrigues me. They are the only airport in the country to have a congestion pricing rule in place. When flights exceed 120 planes an hour (in fair weather), a congestion pricing premium is applied. Interestingly, the airport has agreed to make this congestion tax result in reduced landing fees in off-peak hours, for a promise of revenue neutrality. This is really intriguing. Does this promise of revenue neutrality make congestion pricing more acceptable while still achieving the desired behavioral changes?

[BTW, Logan has yet to hit a traffic load that would trigger the congestion tax.]

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Friday, November 2, 2007

Carbon Taxes or Cap and Trade for Overnight Success?

A debate is raging over whether the next president of United States (we’ve given up on this president taking action) should propose carbon taxes or cap and trade. We need progress now. I will support whatever produces concrete reductions in CO2 emissions immediately and over the long term, meeting the necessary schedule. But carbon taxes are what will actually do the trick.

As far as I can tell, Cap and Trade doesn’t touch the 33% of emissions that come from the transportation sector because CaT is targeted at big industry and utilities. These big players will be forced to buy, trade, and sell for the right to emit. I don’t see how that touches you and me driving our cars (20% of America’s CO2 emissions).

A recent report by Robert Stavins of the Brookings Institute argues that Cap and Trade is less susceptible to political shenanigans and more likely to produce real outcomes. But that certainly hasn’t been the European experience. A New York Times article tells the story of an incinerator in China, financed by Europeans buying carbon credits. The Europeans paid a 100-fold markup on the cost of the reductions achieved by improving the Chinese plant, with plenty of middle men getting rich with little environmental advantage.

Carbon Taxes, on the other hand, will impact every person and sector of the economy. We will all be aware on a daily basis of the cost of our choices (drive or transit? lettuce from Chile or the one from the local farm? Insulate or turn down the thermostat?) and be able to make trade-offs based on our own priorities.

People respond quickly and immediately to price signals as I have learned from Zipcar (where people reduce the vehicle miles they travel by as much as 45% because they decide that it simply isn’t worth $8-$10/hour to go buy some ice cream or return the video). London and Stockholm’s congestion pricing schemes illustrate this reality more overtly. When they turned on congestion pricing, congestion dropped by 20-25% overnight -- literally, not metaphorically. And when Stockholm turned theirs off after the seven-month trial, it increased by 25% immediately, overnight in fact. And this is what we need, overnight success.

Stavins argues that CaT can deliver results, while carbon taxes might not. It'll take years for the investments in cleaner technologies and infrastructure to actually reduce emissions. We don't have time for these investments to be conceived, approved, drafted, built, run over schedule, etc. While we want these improvements in the long run, we need results today.

I recommend that we set the tax rate at whatever is the right price to deliver the desired reductions. We set the US CO2 emissions goal for each year and make a plan for the next decade. Then we set the price of the carbon tax. We review emissions quarterly. On schedule? We clearly have set the price right. Too much carbon still being produced? Raise the tax. Ahead of plan? Reduce the tax. We are already using a system similar to this today: the Federal Reserve changes interest rates periodically to meet money supply goals.

What about poor people and what about middle class people? Won’t this new tax be unsupportable? No. The increases in carbon taxes can be written off against income taxes. Carbon taxes can be tax neutral with respect to your annual tax outlay. But we will be focusing everyone’s behavior on the desired outcome: reduced CO2 emissions.

Given the timeframe we have in which to get worldwide CO2 emissions on a downward path (3 years?), we need to do something that works immediately. We no longer have time to for incentive plans or opt-in plans – that was Kyoto. We no longer have time to get the fine print just right or fret about the gray areas. We need to implement the tax now, monitor closely, and adjust as needed.

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Wednesday, October 31, 2007

Paying for Our Roads

Right now, vehicle transportation infrastructure gets its user-fee financing from a few major sources:

Gas taxes
Road tolls
Residential parking permits
Vehicle registrations

The public belief is that gas taxes pay for road maintenance and road building of everyday roads – despite the fact that gas taxes haven’t been raised in the US since 1991.

The belief is that highway tolls pay for the building and maintenance of highways on which they are charged. Parking permits and registration fees are seen as mechanisms by which taxes are extracted for no good reason.

We can assume that people don’t like taxes. They don’t much like user fees. And they really don’t like what they perceive to be unfair or “double counting.” Nor do they relish falling unexpectedly into rivers, experiencing increasingly extreme weather patterns and brush fires, significant rises in sea level, or extraordinary species loss.

Unfortunately, the reality is that our transportation infrastructure is grossly underfinanced no matter what the public thinks.

We aren’t covering even basic levels of safety and standards for good repair. We don’t have funding for expansion. We don’t charge the real cost of parking. We don’t charge for congestion. We don’t charge for tailpipe emissions. We don’t charge for contributions to global warming. We also don’t charge for a large number of other externalities (adverse health effects; other air pollution, etc.)

A thoughtfully designed user fee system encourages the behaviors we want more of. With adequate revenue sources and drivers paying closer to real costs, better quality transportation alternatives would be both in high demand and fundable! impacting frequency and quality creating a virtuous cycle.

People will choose to drive (and own a car) on a much more rational basis because the costs of driving and owning a car will be overt and highly variable.

  • Drive more, pay more.

  • Drive less, pay less.

  • Drive a fuel efficient car, pay less.

  • Drive during off-peak times, pay less.

  • Shed the unused car stored on the street, pay less.
We’ll be doing more of our car errands at once; we’ll be sharing rides (GoLoco); we’ll be choosing to walk, bike, take transit when they prove to be cheaper than taking the car.

As we know, words matter. What happens when we adopt a tax and call it “congestion charging”? The public will assume that this tax covers the negative impacts of congestion and that its goal is to reduce congestion (by shifting travel to other time periods and by funding alternatives). If we are truly charging for congestion, then fees should be based on square footage occupied by vehicle (or a simple and effective proxy) and actual congestion on that road (such pricing systems are currently used in HOT lanes in California). In other words, vehicles are charged when the road they travel on is congested, irrespective of precisely what time of day it is, or exactly which geographic line is crossed. [OK, I do understand political necessities, I’m talking about policy here.]

Congestion charging should not be muddled with fuel efficient vehicles (which should not get confused with the word “hybrid”), or take into account the number of people within the vehicle (buses, taxis, and trucks should all pay the same rates based on physical footprint on the road). A congestion charged applied to a full bus and divided among 60 people comes out to a trivial amount, and a car with one person in it on an empty street – even if its 10am on a Tuesday -- should not be paying a congestion charge.

What's with incenting people to choose fuel efficient cars? Or taxing "SUVs" more than others to drive within the congested area? Everything! Fuel efficient cars still take up space and make the highway congested; SUVS should and will pay more than small cars inasmuch as they take up more space. If we start encouraging people to think that congestion taxes address all sorts of things, we will have a real battle when we need to increase fees to address financing needs.

The future holds the following requirements, so let’s plan for them.

Road Pricing. As we move toward fuel-efficient cars and alternative fuel cars, the already inadequate revenue generated under our current system of taxing by the gallon will become even more inadequate. A solar powered car still needs a road to drive on and still generates wear and tear yet wouldn't pass a gas tax. An appropriate way to get at wear and tear is based on vehicle weight. Vehicle weight and vehicle footprint can be generally related to each other, so the same piece of information can be used for both congestion pricing and road pricing. Taxing by the gallon is necessarily on its way out; taxing by the mile is the obvious solution. When we go to road pricing, we have to immediately drop gas taxes. No double counting, we’ll lose the public’s confidence. The system must appear fair and transparent to the public – as long as we don’t muck up the messaging of what our intentions are!

Carbon Tax or Tailpipe Tax. Some time in the near future, we are going to buckle down and address transportation’s contribution to global warming. In the US, transportation produces 33% of CO2 emissions. Our personal cars alone produce 20%. Cap and trade systems might be the right approach for power plants and heavy industry, but they have no effect on the 33% of emissions produced in the transportation sector.

I weary of hearing about hybrids and dual-fuel vehicles as the answer, and deserving of special treatment. We need to be outcome focused, not marketing focused. Cars that actually produce fewer CO2 emissions should get credit (a 5 year old Honda civic gets better mileage than almost every hybrid on the market, and offers close competition to the Prius. Several SUV hybrids get worse mileage than the average car in America today). A simple solution would be to add a per mile carbon tax based on type of car engine; a more complex solution would be to monitor what is actually coming out of the tailpipe. In the immediate term, we'll apply a carbon tax to gas.

So what would this look like in the future? A layering of taxes per distance traveled, with congestion pricing taxes being applied when appropriate.

What might we expect once we have installed in every vehicle the ability to bill per mile traveled?
  • Car insurance rates by the mile. Drive less, less risk, pay less

  • A portion of car lease payments by the mile. The value of a car is determined by fixed depreciation costs and the number of miles traveled. Leases will have fixed and variable costs.

  • On street residential parking and private parking rates by the hour and time of day, as well as weight (proxy for physical footprint taking up curb space). If you park in a neighborhood with high demand for on-street parking, you will be rewarded for getting rid of a car rarely driven, or freeing up that space for daytime business use.

And then what?

People will buy cars based on stickers that tell them what they can expect for road and carbon taxes per mile. Fuel efficient cars, space-efficient, and alternative fuel cars will be in high demand.

No individuals should feel they are unfairly bearing the burden because of their unlucky proximity next to arbitrary congestion pricing boundaries, or easily tolled highways that subsidize others. Poor workers with no good alternatives to driving can receive subsidies directly from their employers; car expenses can be shared through ride sharing; quality alternatives will now be demanded by a larger fraction of the population rather than being relegated to a problem of the poor.

What are the alternatives?
Bridges that fall into the river when cars drive over them. A system where one out of every four or five dollars earned pays for a car with no available options. A mixed up revenue plan that is not outcome focused and in which revenue shortfalls or outcome shortfalls are politically impossible to correct because people believe they have already paid and have already done their part.

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Tuesday, October 16, 2007

An overview of a system for implementing congestion pricing that preserves locational privacy

Our proposal for an implementation of a congestion pricing system that preserves locational privacy depends on the idea of "secret dynamic license plates.'' Here's how the system would process the interaction of a driver ("Irving'') and the state toll collection agency ("the DMV'')

At the beginning of the year, Irving privately chooses a collection of "secret dynamic license plates.'' This is just a long list of very large numbers, chosen in such a way so as to minimize the probability of overlap with any other driver's list.

Irving digitally signs the list of license plates, and gives the signature, but not the secret list of license plates, to the DMV.

As Irving drives around, the transponder in his car rapidly cycles through the list of dynamic license plates, at the rate of a new number each second.

When Irving enters the congestion pricing zone, monitoring devices record his current dynamic license plate number as he drives past.

At the end of the billing period, Irving settles with the DMV via the following process:

The DMV has a long list of numbers collected from drivers who have incurred tolls in the congestion pricing zone.

Irving has a long list of secret dynamic license plate numbers, some of which were picked up by the DMV's monitoring devices as he drove past.

Irving and the DMV engage in a secure two-party computation of the charges Irving owes the DMV.

At the end of the secure two-party computation, the DMV has not learned Irving's license plate numbers, only the amount Irving owes (see below for a discussion of how this works). Because the DMV has the signature Irving created when he chose the secret dynamic plate numbers, the DMV can be sure that Irving is paying the tolls accrued by his own secret dynamic plate numbers, even though it doesn't know what those numbers are.

This protocol preserves Irving's locational privacy. The information collected by the DMV does not personally identify Irving, nor does it allow them to actively track his vehicle. Nonetheless, complicated tolling information can be computed accurately during the final interaction. As a further advantage, this kind of implementation integrates well with solutions to automated traffic enforcement (e.g. stoplight cameras to catch red-light violators) that already preserve locational privacy.

Some answers to technical questions about the implementation:

Q: What's a "secure two-party computation"?
A: A protocol for "secure two-party computation" is a modern cryptographic technique which solves the following kind of problem: I have a secret number, and you have a secret number. We want to compute the product of these numbers, but I don't want you to learn my secret and you don't want me to learn your secret. A "secure two-party computation" allows us to compute the product of both numbers without revealing either secret.

Q: This sounds like magic. How could it possibly work?
A: Well, it's complicated. This technology is closely related to the modern cryptographic tools that make secure internet purchases possible (e.g., https) and make ATM's safe for banking. Besides, everyone engages in a very familiar privacy-preserving computation --- voting! After I vote, even though my vote can be used to decide who wins the election, no one knows how I voted. Secure two-party computations work via analogous principles.

Q: How does the state know that Irving isn't lying about the secret list of license plates he chose when this protocol started?
A: That's the point of the digital signature that Irving gave at the beginning --- using it, the DMV can verify that Irving is telling the truth (via another secure two-party interaction).

Q: How does a digital signature work?
A: It produces a number associated with some piece of information (a list of license plates, for instance) that uniquely identifies that list without revealing any other information about it. Imagine that I have a "secret number'', and I tell you the sum of the digits but not the number itself. It would be very hard for me to change my number without altering this sum. Digital signatures work a little like this, only much more securely.

Some more answers to pragmatic questions about the system:

As a general response to concerns about enforcement and potential attempts to defeat this system, it's worth pointing out that the existing situation involving physical license plates is the current gold standard for traffic enforcement. If I physically removed my license plates from my car, it might take a while for the police to catch me, because enforcement would depend solely on visual detection by a passing police officer. Because this system employs many eyes (the system's monitoring devices) in conjunction with the eyes of law enforcement, toll violators should be even easier to catch than someone driving without a physical license plate.

Q: This seems enormously complicated. Won't it be really difficult to implement?
A: It is somewhat complicated; but so was the London congestion pricing system (which is still plagued by high costs associated with collecting the tolls). But all of the hardware we require is basically bootstrapped from existing devices; most of the innovation is in the software. And the basic software for the modern cryptographic tools already exists.

Q: Is each person really responsible for picking a huge list of dynamic license plates and then engaging in this complicated interaction to pay tolls?
A: Well, yes, but drivers will be able to obtain devices that perform these tasks automatically.

Q: What if I try to fool the system by leaving my transponder at home?
A: Just as the police stop people driving without license plates on their cars, they will be able to stop people driving through the congestion pricing zone without transponders. Furthermore, the tolling points can report that a "transponder-less'' car has gone through, alerting local law enforcement.

Q: What happens if I choose not to engage in a periodic interaction to pay my tolls?
A: Drivers already engage in periodic, enforceable interactions with the state to, for example, renew their registrations. Drivers who haven't reconciled their congestion tolls could have their registrations revoked. The state might provide financial incentives to encourage early settlements of toll bills. Or the transponders could be equipped with a time-stamped authorization to operate, which expires at intervals and is renewed as part of the bill-settling process.

Q: Does this mean everyone has to have a transponder?
A: Yes.

Q: What about tourists and people "just passing through''?
A: Tourists and other legitimate sporadic users can pick up transponders at gas stations, convenience stores, and rest areas and leave a deposit in addition to charging up the device. On exiting the congestion charging area, these transponders can be returned and the deposit and congestion pricing balance credited back to the driver. These prepaid transponders would likely not preserve locational privacy, although they could be designed to do so.

Q: How could the system be integrated with automatic traffic enforcement?
A: Once the "secret dynamic license plates'' infrastructure is in place, it's easy to build traffic enforcement systems (or retrofit existing ones) that respect locational privacy. For instance, when a stop-light violation is detected, the vehicle's current dynamic license plate could be recorded rather than the physical license plate. Once again, via a secure two-party computation, tickets can be assessed.

Q: Do we really want freight trucks to be anonymous?
A: This system is designed primarily for passenger cars on personal business. Freight trucks engaged in commercial shipping probably should be closely monitored and tracked at all times. The point of this system is to preserve the locational privacy of private citizens using personal vehicles, while at the same time allowing the collection of congestion tolls and other traffic-management fees.

Authors of this posting are Andrew J. Blumberg, Department of Mathematics, Stanford University, Stanford, CA 94305, email blumberg @ and Robin Chase, Meadow Networks, email robin @

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Congestion pricing poses a threat to locational privacy.

What this means and why you should care

Q: What does "locational privacy" mean?
A: "Locational privacy" means the ability to walk in public space and drive on public roads with the expectation that one's movements are not being tracked or recorded for later analysis.

Q: How will congestion pricing violate my locational privacy?
A: Congestion pricing systems track drivers in order to charge them for their road usage. In practice, congestion pricing systems use pervasive networks of cameras and electronic tag readers to charge drivers and catch violators. Some proposed systems require a GPS transmitter in every car to assess charges based on the car's recorded path. Almost all of the designs in use or under consideration require the tolling authority to build a giant database of tracking information that includes data for each driver who uses the congestion pricing zone.

Q: Aren't law enforcement agencies allowed to track my movements already? How is congestion pricing different?
A: The police have limited resources to devote to tracking your movements. As a consequence, they can't afford to track very many people at once. Besides, it's hard for the police to track you without your knowledge -- even if an unmarked car is following you, you'll probably become aware of it sooner or later. With a congestion pricing system, by contrast, a widespread network of inexpensive data-collection devices silently records everyone's movements in a central log, without anyone noticing. This quantitative difference in the ease of tracking and exploiting the collected data creates a huge qualitative difference in the tracking's impact. It's like wiretapping: there's a critical qualitative difference between single wiretaps that require a court order and disclosure, and the government secretly recording all phone calls for subsequent analysis.

Q: Don't EZ-Pass and similar existing electronic tolling systems already violate my locational privacy this way?
A: YES! The tolling data collected by EZ-Pass is linked to a credit card account (without being encoded to protect your privacy) and then stored in a single central location. In contrast, "electronic cash''-based highway tolling systems which preserve locational privacy have been deployed in the past, but are not widespread today.

Q: Won't the government keep the data safe and delete it as soon as it's no longer needed?
A: No. Many states keep EZ-Pass tolling data indefinitely, for example, and such data has already been (successfully) subpoenaed for use in divorce cases. Tolling authorities will be tempted to keep the data for ostensibly reasonable "law and order'' purposes.

Q: What kinds of tracking data misuse should we be afraid of?
A: It's easy to imagine civil-rights abuses based on data-mining. For instance, people who are tracked driving to a mosque might be referred to the FBI for careful observation. People who are tracked visiting the Riverdale Democratic clubhouse could be singled out for audits by the IRS. Neither of these examples is farfetched --- reports of officers recording the license plate numbers of cars parked at mosques are fairly widespread, and All Souls church in Pasadena was investigated by the IRS and threatened with revocation of its tax-exempt status based on an anti-war sermon delivered in 2004. And of course, such data could be used to pursue illegal immigrants. In addition to actual government abuses, the reasonable fear that visits to such locations might be tracked, stored and used later could have a chilling effect on legitimate political and religious expression.

Q: I frequently provide a lot of identifying information about my physical location --- for instance, to my credit card company. Why is this any worse?
A: It's hard to interact with the modern financial world without leaving a trace. And if you have a cell phone, you're probably already trackable by your cell phone company. But that doesn't make it right. The slow but steady erosion of locational privacy is a good reason to be concerned about further loss of privacy. Anyway, if you're worried about privacy, it's much easier to switch to cash, or turn off your cell phone occasionally, than to stop driving. Furthermore, these two examples involve the use of your data by private corporations, which -- unlike the government -- have no power to arrest you or take away your rights.

Q: Pervasive tracking of all vehicles will provide needed security in this age of terrorism. Shouldn't we be willing to sacrifice this kind of privacy for security?
A: No. We should no more have to sacrifice locational privacy for security than we should have to consent to the deprivation of any other rights. Residents of former Eastern bloc countries have written eloquently about the horrors of pervasive monitoring and surveillance. Even if it were reasonable to have cameras constantly watching high-risk areas (Wall Street, courthouses, and so forth), congestion pricing will cover the city and eventually the whole metropolitan area, and pervasive surveillance everywhere is fundamentally incompatible with a free and democratic society.

Q: Driving is privilege, not a right. Why shouldn't we demand the sacrifice of privacy in return for that privilege?
A: Particularly in areas that are poorly served by mass transit, it's such a hardship to refrain from driving that there's no reasonable way to opt out. In those situations, this proposition is coercive. As an analogy, suppose we demanded that people whose homes are connected to public sewer lines allow cameras in their bathrooms to track water usage. But there's really no need to use cameras for the purpose of monitoring water usage --- and the same is true of congestion pricing (see the next question).

Q: But we need congestion pricing systems to alleviate downtown traffic problems. What alternatives do we have?
A: There are ways of designing congestion pricing systems that preserve locational privacy! Using modern cryptography, a congestion pricing system could simultaneously protect our locational privacy and allow tolling authorities to collect revenue. This is the same technology that makes it safe to use ATMs or buy things online. See our other documents for more information on how this could work.

Authors of this posting are Andrew J. Blumberg, Department of Mathematics, Stanford University, Stanford, CA 94305, email blumberg @ and Robin Chase, Meadow Networks, email robin @

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Technology Recommendations for Congestion Pricing

For historical reasons, wireless systems for use in the transportation sector have taken a separate path for technology development. This divergence no longer makes sense. Every other sector in the economy is finding secure, reliable, and economical systems that use internet-protocol and are highly compatible. Continued insistence on separate radio frequencies, closed networks, and obscure proprietary standards mean that technology investments in transportation don't take advantage of low-cost high-volume components developed for the consumer market or advances in communications hardware and routing software.

Rest-of-the-World Trends: Open networks, Device Convergence, Open Standards, Extensible/Interoperable, Consumer products/parts (high volume, low cost), Redundant networks base, Robustness/Redundancy


Intelligent Transportation Systems: Closed network, DSRC (Dedicated Short Range Communications), Single-purpose devices, Proprietary, inflexible, lock in, high cost, path dependency, can’t leverage others’investment, centralized command & control (single points of failure)

Below are our recommendations in priority order. Wireless infrastructure investments for congestion pricing, open-road tolling, and road pricing should be:

  • Open networks (the data transmission required for user-fees is very small, meaning that a huge amount of excess capacity in these networks is available and should be made available to the public given that this infrastructure is being paid for with taxpayer dollars).
  • Open standards (making these networks open is only interesting and useful to others if open standards are used).
  • A mesh network be employed.
  • An open source mesh network be employed.
  • An extensible/interoperable network should be deployed (creating opportunities for user-driven innovation, add-ons -- think Google open API model)
What would this system look like? What are the benefits of a system so configured?

Imagine a mesh "white box" in every car that travels through the city. The device would cost between $30-$50 in the volumes needed and be built using low-cost, widely available standard hardware components and open source software. (EZ passes hardwares cost $28). Each car would become a node in a dynamic mesh network, routing and repeating packets of data. People who purchase and install the devices in their cars can be given the first $100-$150 in congestion fees for free. System security requirements would be no different than any other wireless infrastructure, and preserving ample bandwidth for the purpose of collecting fees can be assured. Implementers would need only be responsible for providing key backhaul nodes (e.g., at critical intersections, exits, etc.) while end-users would drive the node density necessary to expand the network. The implications:
  • The amount of capital required to implement, maintain, and extend a congestion pricing system is reduced in several ways:
    • Congestion pricing hardware, and the majority of the wireless infrastructure, is financed and installed by end users.
    • Less infrastructure installed means less to maintain
    • This dramatically reduces the debt burden required and the cost of financing it.
    • Because the devices are self-configuring, there are reduced engineering costs.
    • Reduced installation costs (simply plug them into the vehicles).
    • The system can come online and be operational in less time than a system of tags and beacons, and therefore the free premium given to drivers would be a net revenue wash.
    • Very low on-going communications costs because the system relies primarily on free peer-to-peer data transmission.
  • System redundancy is inherent in such a network. There would be no single point of failure and no need for redundant systems to be designed and included.
  • Car location and charging could be based on GPS position or triangulation of vehicles relative to other vehicle and gateways (where the data enters the internet) similar to systems used by Loki and TomTom. [A discussion of protecting locational privacy is discussed in another paper.]
  • An in-vehicle mesh-based system allows infinite flexibility in the congestion pricing system.
    • The initial pricing cordon chosen by the city can be changed over time without additional on-street hardware investment (At considerable expense, London expanded its cordon from the CBD to a larger section of London after 4 years).
    • A dynamic real-time congestion pricing could be implemented covering all city streets, eliminating undesirable edge effects created by a cordon, charging based on actual congestion, increasing public perception of system fairness (charges based on real congestion, not arbitrary geography)
  • Enforcement would not be based on cameras and license plate photography, but rather on-the-ground enforcement officials determining whether individual cars in their proximity have an active device. High fines/tickets can be given to those vehicles without the device that are within the congestion pricing zone.
  • "Tourist" vehicles passing through the congestion pricing zone can pick up a device at gas stations, highway rest areas, and convenience stores. The cost of the device would be required as a deposit (in cash or by credit card) with an additional amount paid for anticipated fees. On exiting the congestion pricing zone, these devices can be returned with the deposit and unused funds returned to the driver. Those who choose this system would not be eligible for locational privacy, nor the free service premium given to those individuals who buy the device outright.
  • Facilitates layering of additional services and applications on a de-prioritized basis vis-a-vis congestion pricing/network data, creating additional potential revenue sources and value to users (e.g., internet access, social networking software, geolocational advertising, real-time traffic/congestion data for drivers).
  • Can be utilized to send emergency communications messages to all cars, cars in specific areas, etc.
There are considerable positive "externalities" that this system would give to the city that adopts it:
  • Because the network is open to all, within the congestion pricing zone, Manhattan would effectively be one dynamic wireless hotspot
  • A ubiquitous wireless network throughout the city, open to all, will generate an untolled/untold amount of innovation and economic development.
  • Over time one can anticipate other devices joining the mesh created by the vehicles. Each one of these devices leverages the existing investment of all the previous devices, contributes to the mesh, and gets the full advantages of zero cost peer-to-peer communication within the city. These new devices might be those purchased by other city departments (homeland security, police, emergency vehicles, education, health, social services), or by city residents (mesh-enabled laptops, cell phones, PDAs). The result is a scalable, resilient communications system. Different user classes and/or prioritization schemata can be utilized to ensure critical communications have access to this robust and redundant communications infrastructure.
  • An open tech system avoids path dependencies and ensures maximum extensibility during a time of rapid technological innovation and evolution.

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