07.27.2015Enterprise Tech

Oregon Taps Verizon Telematics for First Large-Scale Road Usage Charge Program

The Oregon Department of Transportation (ODOT) kicked off the state’s new pay-by-the mile road usage charge program welcoming drivers to enroll online. Officially coined OReGO, this new pay-per-mile program is now available to Oregonians as an alternative means of collecting revenue for road improvements. Verizon Telematics will be part of the new program “test drive,” which is open to 5,000 vehicles statewide on a voluntary basis.

Oregon, the first state in North America to implement a road usage charge program, is a member of the Western Road Usage Charge Consortium comprised of 12 states committed to research and development of road usage charging as a potential new transportation funding method.

 

The Long Road to a Use-Based Solution

In 2001, the Oregon Legislature established the Road User Fee Task Force to explore revenue alternatives. They determined that a usage-based revenue collection system could eventually replace the gas tax and set out to test its feasibility. The task force realized that as electric, hybrid and more fuel-efficient vehicles gain consumer acceptance, the revenue currently collected for road infrastructure improvements via gas taxes would shrink significantly. The state also developed two pilot programs designed to test the concepts that the task force came up with.

“Oregon’s task force wanted a sustainable tax solution to serve as an alternative to the gas tax, and thought it should be based on actual use of the road system rather than fuel use,” said Jim Whitty, manager, Office of Innovative Partnerships and Alternative Funding, Oregon Department of Transportation.

ODOT completed successful pilot programs in 2007 and 2013 to determine if road usage tax collection was a viable option. The biggest takeaway from the pilots was the recognition that having a government agency managing billing and collection of a homegrown mileage reporting program would prove to be too expensive to operate. Whitty and his team decided that the best thing to do was create an open market for consumers to choose road usage reporting equipment and let the private sector compete for that market.

 

Enter Verizon

Verizon Telematics, a pioneer of connected vehicle technology, was approved by ODOT to take part in its road usage charge program and will be offering a solution based on its leading In-Drive service.

By completing the certification process, Verizon Telematics met Oregon’s stringent requirements for data collection, including accuracy, protection of privacy, security and various business reporting requirements.

“I was enthused when we saw the serious proposals come back from companies like Verizon,” Whitty said. “This validates the fact that the market can develop viable technology for this program, and we can have a truly efficient new tax program that funds the road system.”

Current In-Drive customers, who choose to participate, will be able to easily sign up as they already have the required hardware in their vehicles.  In addition to usage-based mileage reporting, the Verizon solution includes value-added services, including: incident alerts, stolen vehicle location, maintenance/service reminders, vehicle health reports and more.

After a thorough review of the pay-per-mile system, the Oregon Legislature will consider next steps which may include adding drivers to the program or extending its reach.

“We've made our contractual documents broad enough so that if there is a mandatory system later, Verizon would not need to reapply,” Whitty said. “They could just slide right over to that system. And if there are opportunities for similar systems in other states, Verizon could be available to those states as well.”

 

Oregon and Beyond

While Oregon doesn’t have regional agreements with other states yet, it is something that could happen over time. According to Whitty, “The system ODOT has established could be available to any state that wants to follow the Oregon model, or a similar model established cooperatively with other states."