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Made-to-measure road toll system

Published February 14, 2009


Travellers on the Susa-Babylon highway often wondered if their road tolls actually paid for its maintenance, or went to King Ashurbanipal’s other pet project: the world’s first library.

Things haven’t changed much since the seventh century B.C.

Road tolls continue to instill fear and loathing in motorists today – and the grumbling may rise to a crescendo now that a Toronto company has found a way to accurately price road use.

RELATED: Toll roads drive Jim Kenzie mad

At the same time, Skymeter Corporation – a high-tech upstart that has perfected “financial-grade” GPS telematics – is being hailed as an innovator that has captured the attention of global giants such as IBM, Cisco and Siemens.

Its wireless technology will allow vehicles to communicate with parking meters, highway operators and even insurance companies to generate instant billing for time spent in a parking spot, distance travelled on a road and even “pay as you go” insurance coverage.

“The problem with transportation right now is a lack of good information. People don’t know the actual cost of driving,” says J.D. Hassan, vice-president of business development at Skymeter. “Roads are paid by everyone through taxes – fuel, property, sales and income – largely without regard to their actual use of the system. It’s a peanut butter tax – we spread it on everything.

“The person who walks or cycles subsidizes the person who drives; all of them subsidize the trucks that damage the roads.”

Toll collection hasn’t changed much in 2,700 years: toll booths at each end of a bridge or controlled-access highway extract money from users. Modern variations include photographing vehicles as they pass under a gantry or grabbing signals from vehicle transponders to generate a bill.

Such systems are difficult and expensive to manage, and unwieldy in big urban areas like London and Singapore that require countless gantries to monitor every road in and out of downtown.

So Hassan and his colleagues looked for a solution. What if every vehicle was equipped with a global positioning system (GPS) unit that could accurately detail the location and movements of the car and upload the information to metering companies? GPS technology has been refined, but even the best units used in cars today can produce various results, especially in downtown areas where satellite signals get bounced around.

“If you don’t have accuracy, you don’t have anything,” says Hassan of the challenge of creating financial-grade GPS, defined as “same trip, same charge.” It requires identical trips tracked by the system to generate the same sum in terms of dollars and cents every time.

“We spent six years working on the algorithms to find the answer,” Hassan says. “They said we had to wait until the European Union put more satellites in orbit, but we proved we could get the accuracy with the existing satellites pinging the Earth.”

The system makes use of existing global positioning satellites and transmits the information over cellular data networks. What constitutes the “tolling zone” is easily defined in the flexible back-end software rather than by using hard points on the ground.

“This company is 75 per cent software and 25 per cent hardware,” says Hassan, referring to the firm’s little black box that sticks to the vehicle’s windshield. He estimates the sunglass-holder-sized device may sell for $225 – or next to nothing if the motorist opts for a long-term contract with a service provider, such as a parking authority.

With Skymeter’s accurate road-use and billing data, governments can finally tap the appropriate users to pay for crumbling infrastructure, paralyzing traffic congestion and deteriorating air quality.

By pricing every trip on every road in the country – as the Netherlands plans to do – individual motorists end up paying only for the roads they use.

“It’s all about fairness for road users,” says Preet Khalsa, Skymeter’s chief technology officer. “Canadian road taxes are an all-you-can-eat buffet that doesn’t demonstrate value for your money.”

Skymeter’s technology earned it a $500,000 loan from the Ontario Ministry of Research and Innovation to help bring it to market. The firm passed a rigorous eligibility process to prove its ideas had merit.

“The technologies or intellectual property that Skymeter intends to commercialize must have unique and protectable aspects that establish a sustainable competitive advantage,” says John Wilkinson, Minister of Research and Innovation. “Skymeter must have unencumbered rights to commercialize the technology.

“Good ideas become good jobs right here in Ontario,” he adds, with an oblique reference to BlackBerry maker Research in Motion, which received government seed money years ago.

Ministry of Transportation spokesperson Bob Nichols says they’ve met with Skymeter representatives, but GPS technology is only one of a number of technologies the government is considering as it contemplates new ways to finance highway improvements.

“The province always looks for innovative ways to fund future investment in infrastructure, including tolling of highways, provided the public interest is protected,” he says. “Tolls are not being considered on existing provincially-owned 400-series highways. City councils are responsible for determining whether tolling or congestion charging is a feature needed on their roadways.”

Two Toronto-owned highways ripe for the picking are the Don Valley Parkway and the Gardiner Expressway – although talk of tolling the popular routes has so far proven to be political suicide.

Roads and bridges should be free of tolls given the tax burden already borne by motorists, says the Canadian Automobile Association.

“Of top concern to CAA is that the amount of motoring-related taxes and fees collected from motorists should reflect the amount of government investment in road and bridge infrastructure and services provided to motorists,” says CAA spokesperson Edyta Zdancewicz. “Of additional concern to CAA is the need for fairness and affordability, especially for seniors and low-income motorists.”

Hassan admits while North America may not be ready for road and congestion tolls, governments elsewhere are beating a path to his modest office at the MaRS business incubator at College St and University Ave.

With Germany tracking and billing trucks on the Autobahn, France is contemplating using Skymeter to charge heavy trucks that use its roads to skirt the German system.

While Skymeter is a relative flyweight (the company is estimated to be worth $10 million), it hopes to be the technology provider to large multinationals such as IBM and Siemens in the project tenders.

He believes the U.S. and Canada will adopt the technology once the political will materializes.

Hassan says with minor tweaks the system can be adapted to interact with point-of-sale systems, allowing consumers to purchase food at a drive-through window without opening a wallet.

The elephant in the room is a concern about privacy.

“(It) begs a lot of questions about the circumstances under which specific movements of specific vehicles could be tracked individually and used against motorists for a variety of reasons,” says Zdancewicz.

There are business models that can protect privacy, says Hassan.

Skymeter is poised to usher in smart metering and – if the execution holds true to the vision – tolls that directly fund roads that are in demand.

Old Ashurbanipal would have been impressed.

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