July 9, 2021
Road usage charging is growing in popularity as a method of funding the Highway Trust Fund in the face of our nation’s crumbling infrastructure. A road usage charge simply means that drivers are charged based on how many miles they drive instead of the current gas tax system. The gas tax system is out of date due to inflation and fuel-efficient and electric vehicles, so we need a new solution to make sure everyone is paying for their use of the road. What are the pros and cons of the road usage charge, and how will it affect fleet businesses who drive more than anyone else in the country?
The first thing that any fleet business is probably wondering about road usage charging is how costs will change. The short answer is that they won’t change very much. Fuel-efficient and electric vehicles may see a change, but most drivers will not experience a difference if the program is appropriately implemented. For example, in Hawaii’s discussion of road usage charging in Kauai, they found that the average driver pays $75 a year in gas taxes. With road usage charging in place, they would still pay about $75 annually. With this news, fleet businesses can continue to thrive without worry of damage to their bottom line by government policy.
Privacy is a concern for many fleet drivers, especially with fleet managers already tracking their driving. Beyond that, fleet managers and businesses themselves may even have concerns about a state-run tracking app following their drivers’ moves. Everyone wants to have their privacy, and the goal of this program is not to encroach upon this territory. Policymakers have addressed this issue in a couple of different ways. Firstly, the data collected will be protected to the utmost degree because administrators will have limited access, and it will be destroyed after 30 days. Secondly, programs are required to offer multiple mileage reporting options—including non-location and manual reporting methods.
The goal of road usage charging is, naturally, to add more money to the Highway Trust Fund and pay for repairs to roads, bridges, and tunnels. Our nation’s infrastructure is in a dangerous state. 49% of our roads are in disrepair. These poor road conditions cause over 22,000 traffic fatalities a year and contribute to 38% of injuries. Implementing road usage charging nationwide could add $340 million in funding to the Highway Trust Fund. Governments would use this money to repair and maintain our existing roads and build new roads to handle the traffic resulting from our growing population. Fleets need better roads to stay safe on the job, and road usage charging can help get them there.
There’s no question that fuel-efficient and electric vehicles are better for the environment. In modern times, ecology is of serious concern to businesses and customers alike. If these vehicles pay the same as other drivers under a road usage charging policy, detractors argue that the incentive to purchase environmentally-friendly vehicles is lost. Policymakers are responding to this by implementing other incentives. For example, Oregon exempts those who enroll in their road usage fee program from paying increased fees on their vehicle registration. Other states who implement similar programs may choose to implement similar incentives to keep green vehicles on the road. Being green is crucial for fleets, who benefit from a green reputation among their customers and the community.
Currently, the only significant road usage charging program is OReGO in Oregon, which uses Azuga Insight to track miles driven. This device is simple to install and doesn’t require a mechanic or any downtime in the shop. Users simply plug the hardware into their vehicle’s OBD port, which most vehicles built after 1996 have. Once the device is installed, the driver simply sets up a digital wallet online. The device tracks miles driven and automatically deducts money from the digital wallet. No need for collections or administrative hours! Azuga is working with other states considering road usage charging programs to implement Azuga Insight in their programs as well.
Road usage charging is likely the way of the future when addressing our nation’s deteriorating infrastructure. The gas tax simply won’t cut it anymore, so it’s crucial to find a new solution as soon as possible. Everyone on the road’s safety depends on it. Azuga has created Azuga Insight to make road usage charging possible, and our other technologies help fleets streamline and optimize operations every day. Learn more about what Azuga has to offer fleet businesses on our website.