By Robbie Webber
The first program to charge a per-mile fee to drivers will launch July 1 in Oregon. Although beginning with only 5,000 volunteers, the program will continue to expand as an alternative to reliance on the gas tax. Other states are considering similar programs as gas tax revenues become less reliable due to more fuel-efficient cars and new technology. In addition, states are realizing that wear and tear from road use, congestion, and travel time delays can occur regardless of the fuel being used by vehicles, so the gas tax may not be the best user-fee for the future.
Participants in the program can choose from three authorized payment and management options, run by three separate companies. Although participants will still pay the gas tax at the pump, they either receive a rebate on their gas taxes or pay more if the gas tax is less than the per-mile charge of 1.5 cents.
The program, called OReGo, has an on-line calculator to allow drivers to compare their estimated cost under the program against what they currently pay in gas taxes. Drivers of smaller, more fuel-efficient cars will likely pay more under the program, whereas drivers of lower-MPG cars will get a rebate. The break-even between the mileage fee and the gas tax seems to be around 20 MPG. However the initial program restricts the number of participants with low-mileage vehicles that can enroll.
Although almost every news article on the program is followed by an extensive comments section complaining about per-mileage fees creating disincentives to buying green-technology cars, the savings on fuel overall are far greater than the small additional per-mile fee, as shown by an ODOT infographic.
The three companies chosen to manage the program and collect fees each offer different features. Under state legislation passed in 2013, at least one company must offer an option that does not rely on GPS tracking. That option is being offered by Sanef, part of Intelligent Mechatronic Systems based in Canada. Payment under this system is via credit or debit card. A mileage reporting device must still be plugged into the vehicle’s diagnostic port, but location is not tracked. However, without the GPS tracking, miles driven outside the state or on private roads are also included in the fee.
Azuga offers a GPS-based option that relies on a pre-paid account that can be recharged by credit card, check, or money order. Fees are deducted from the account automatically, and miles driven out of state or on private roads are deducted. A number of additional services are included, such as monitoring usage by other drivers (such as young drivers), trip logs and carbon tracking, and helping you find your way back to your car if you forgot where you parked it.
The third program option is by Verizon Telematics, but it is currently only available to drivers already signed up for the In-Drive program offered by insurance companies. Like the Azuga option, it is GPS-based and credits miles driven outside the state. However payment is via a monthly bill instead of a pre-paid account. In the future, Verizon Telematics will offer an option for those not enrolled in the insurance program. The In-Drive program offers similar additional benefits to Azuga’s option.
Robbie Webber is a Senior Associate at SSTI.
By Robbie Webber