The Benefits of Road Usage Fees and How They Replace Gas Taxes

April 27, 2021

America’s infrastructure is falling apart as it ages. The average rate of disrepair for roads in all of the United States is 49%. Crumbling roads can lead to accidents, wear and tear on vehicles, and overall unsafe conditions. According to a study by the Pacific Institute for Research and Evaluation, poor road conditions cause over 22,000 traffic fatalities every year and contribute to 38% of injuries. Solving this problem should be a top priority, but how is it possible? Most construction and maintenance of roads are currently paid for by taxes on gasoline. However, road usage fees are coming out as an alternative to the gas tax and offer many benefits. This article will explain what road usage fees are, how they are better than the gas tax, and how states can implement them in the future. 

What is Road Usage Charging?

Road usage charging (RUC) is a practice in which the government charges drivers for using a road based on how many miles they travel. It is also known as distance-based user fees (DBUF), mileage tax, vehicle miles traveled tax (VMTT), and mileage-based user fees (MBUF). Road usage fees are similar to but different from tolls. Tolls charge motorists for the use of a specific feature like freeways, tunnels, or bridges. On the other hand, road usage fees apply to all roads within a particular area, 24/7. The practice is not widespread, but eight states (Washington, California, Colorado, Delaware, Hawaii, Oregon, Pennsylvania, and Minnesota) have implemented these programs to some degree. 

Oregon created their RUC program, OReGO, in 2015. The program is entirely voluntary but offers incentives to people for joining, such as lower registration fees and remote emissions testing. Based on the success of OReGO and similar programs, more states are seeing the benefits and considering implementing them all over the country. 

The Benefits of RUC

Funding roads has been a significant challenge in recent years for a variety of reasons. Right now, most road funds come from state and federal fuel taxes. The problem with these taxes is that they haven’t kept up with inflation. These taxes are now worth 40% less than 25 years ago. Fuel-efficient and electric vehicles pose another difficulty; they pay far less in fuel tax per mile. If the current method of funding roads continues, there won’t be funding for new infrastructure to keep up with the increasing number of vehicles on the road. 

RUC eliminates these problems by charging all vehicles based on their mileage driven, regardless of fuel use. OReGO estimates that implementing an RUC program would bring in an additional $340 million in revenue compared to the gas tax over the next decade. This would immensely help to build new roads and infrastructure and maintain the roads that already exist. 

Azuga Insight

Azuga helped to create OReGO. To make implementation easier, they offer Azuga Insight, a service that automatically reports a driver’s miles and takes the road usage fee out of each driver’s digital wallet. This system automates the process of charging per mile without causing added stress to the driver. It also provides incentives such as electronic emission testing, so drivers don’t have to go through the time-consuming hassle of emissions testing. 

With GPS tracking enabled, drivers can utilize visual trip logs that keep track of where they have been or offer location alerts to keep teen drivers safe. Such a system also provides diagnostic alerts, including engine trouble and battery voltage alerts, so drivers always know their vehicles’ status. There are many benefits to enrolling in OReGO and using Azuga Insight, both for drivers and the roads they travel.

To enroll in Azuga Insight, a driver’s vehicle must be light-duty, rated at 20 miles-per-gallon or better, and registered to an Oregon resident. To properly install the hardware, the vehicle must also have an OBD port. As long as a driver meets these simple requirements, installing Azuga Insight is a breeze and using it is even easier! Reach out to Azuga today to learn more and enroll. 

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The Benefits of Road Usage Fees and How They Replace Gas Taxes

April 27, 2021

America’s infrastructure is falling apart as it ages. The average rate of disrepair for roads in all of the United States is 49%. Crumbling roads can lead to accidents, wear and tear on vehicles, and overall unsafe conditions. According to a study by the Pacific Institute for Research and Evaluation, poor road conditions cause over 22,000 traffic fatalities every year and contribute to 38% of injuries. Solving this problem should be a top priority, but how is it possible? Most construction and maintenance of roads are currently paid for by taxes on gasoline. However, road usage fees are coming out as an alternative to the gas tax and offer many benefits. This article will explain what road usage fees are, how they are better than the gas tax, and how states can implement them in the future. 

What is Road Usage Charging?

Road usage charging (RUC) is a practice in which the government charges drivers for using a road based on how many miles they travel. It is also known as distance-based user fees (DBUF), mileage tax, vehicle miles traveled tax (VMTT), and mileage-based user fees (MBUF). Road usage fees are similar to but different from tolls. Tolls charge motorists for the use of a specific feature like freeways, tunnels, or bridges. On the other hand, road usage fees apply to all roads within a particular area, 24/7. The practice is not widespread, but eight states (Washington, California, Colorado, Delaware, Hawaii, Oregon, Pennsylvania, and Minnesota) have implemented these programs to some degree. 

Oregon created their RUC program, OReGO, in 2015. The program is entirely voluntary but offers incentives to people for joining, such as lower registration fees and remote emissions testing. Based on the success of OReGO and similar programs, more states are seeing the benefits and considering implementing them all over the country. 

The Benefits of RUC

Funding roads has been a significant challenge in recent years for a variety of reasons. Right now, most road funds come from state and federal fuel taxes. The problem with these taxes is that they haven’t kept up with inflation. These taxes are now worth 40% less than 25 years ago. Fuel-efficient and electric vehicles pose another difficulty; they pay far less in fuel tax per mile. If the current method of funding roads continues, there won’t be funding for new infrastructure to keep up with the increasing number of vehicles on the road. 

RUC eliminates these problems by charging all vehicles based on their mileage driven, regardless of fuel use. OReGO estimates that implementing an RUC program would bring in an additional $340 million in revenue compared to the gas tax over the next decade. This would immensely help to build new roads and infrastructure and maintain the roads that already exist. 

Azuga Insight

Azuga helped to create OReGO. To make implementation easier, they offer Azuga Insight, a service that automatically reports a driver’s miles and takes the road usage fee out of each driver’s digital wallet. This system automates the process of charging per mile without causing added stress to the driver. It also provides incentives such as electronic emission testing, so drivers don’t have to go through the time-consuming hassle of emissions testing. 

With GPS tracking enabled, drivers can utilize visual trip logs that keep track of where they have been or offer location alerts to keep teen drivers safe. Such a system also provides diagnostic alerts, including engine trouble and battery voltage alerts, so drivers always know their vehicles’ status. There are many benefits to enrolling in OReGO and using Azuga Insight, both for drivers and the roads they travel.

To enroll in Azuga Insight, a driver’s vehicle must be light-duty, rated at 20 miles-per-gallon or better, and registered to an Oregon resident. To properly install the hardware, the vehicle must also have an OBD port. As long as a driver meets these simple requirements, installing Azuga Insight is a breeze and using it is even easier! Reach out to Azuga today to learn more and enroll. 

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