Deploying Electronic Tolls

Problem

Electronic toll collection (ETC) is a completely new way to collect tolls, with the potential to reduce congestion, delay, and gasoline consumption, staffing costs of the toll agency, and air pollution. Implementing agencies need to know how quickly lanes should be converted to ETC, and what discount to offer subscribers. Too many lanes converted too quickly will increase delay for those who are not yet subscribers, and too high a discount can cut into the toll agency's revenue.

Method

We used a dynamic payment choice model to understand how users choose whether to buy an ETC transponder or not. In the model, travel time, ideal lane configuration, optimal discount, and payment choice are all interrelated. We apply the model to California's Carquinez Bridge.

Findings

Societal benefits and costs of ETC vary with demand and the number of ETC lanes, and the question for agencies is: what provides the most benefit at the least cost?

Overall welfare is improved the greater the ETC market share, and the sooner that share is achieved. Toll agencies can affect the evolution of ETC by imposing congestion on manual toll lanes by decreasing their number, and by increasing the size of the discount offered to ETC subscribers.

There is a "buy-in" hurdle that keeps people from subscribing to ETC, which involves buying a transponder and establishing an account. At this time we are unable to say precisely what is the source of that reluctance, and whether it will rise or fall over time. While our data for the Carquinez Bridge suggests it might not fall, the agency did very little marketing while it learned to make the technology work smoothly, and a more concerted effort in this area could shift preferences towards ETC. Also, non-user confidence increases with the number of users, as drivers see others benefiting from it.

Compatible systems using the same transponder (various bridges and toll roads, and even parking lots and service stations, as has been implemented in some areas) increase the utility and value of the transponders as well as the likelihood that drivers will become subscribers.