I wrote a little bit about transportation utility fees last week. Today, I want to write about another cool (and more futuristic) innovation in transportation funding that I alluded to briefly in my last post. Mileage-based user fees, also known as MBUFs or VMT fees.

For the past hundred years or so, the main way that we have paid for most surface transportation (roads for cars, and to a lesser degree, capital investment in public transit) has been through state and federal gas taxes. For the most part, this seems fair. The more we all drive, the more expensive our roads get, both because we need to build more of them to fit all our cars and because all that driving wears out the existing roads faster. So it makes sense that the more you drive, the more you should pay. And paying for roads with the gas tax accomplishes that because people who drive more use more gas.

Or do they? A fully-electric car is likely to take up about as much space and weighs about as much as a gasoline-powered car. If we all started driving electric cars, that would be a great thing for air quality and for reducing our reliance on fossil fuels (depending on where that electricity is coming from), but it leaves us with no gas tax revenues to maintain and build roads which, until out electric cars can also fly, we’ll still need.

Fuel efficient cars aren’t the only problem with the gas tax. The other problem is that you need politicians who are willing to raise taxes as the costs of road construction and maintenance increases. The Federal fuel tax has been 18.4 cents per gallon since 1993. 18.4 cents doesn’t buy you as much road today as it did in the 90s.

So what it we abandoned the gas tax? What would we do instead? One cool idea is the mileage-based user fee. The idea is, you would have a device in your car that keeps track of where you drive and maybe also when. Then you get a monthly bill for your use of various types of roads. If you drive on local roads that are maintained by the city, your money would go to the city. If you drive on state highways, then a share of money would go to the state DOT. And if you drive on the Interstate, for example, the money for that might go to the Federal government. Since you have a bigger impact on traffic operations when a road is congested than when it isn’t, you might pay more to drive during congested time periods than in the middle of the night, for example.

Some cool things about MBUFs that we don’t get with the gas tax:

(1) People’s payments are based on a much better approximation of the actual impact they are having on the transportation system. That means that when people make decisions that lead to more efficient use of the transportation system, they save money!

(2) Data! The data collected to figure out how much to charge everyone could be used for other things, like planning for which roads might need to be repaired soonest and where additional capacity might be needed.

Of course, that second point also makes some people a little bit uncomfortable. Not everyone loves the idea of widespread government surveillance. There are ways to get around that. You could collect the data in a way that would protect everyone’s privacy while still providing useful information for traffic engineers and transportation planners. Or you could give up on those cool data collection benefits and set up your data collection devices so that the only information they ever store is the total amount of money the driver owes to each jurisdiction.

The most recent highway bill, the FAST Act, that was just passed in December has approved some funding to study what a MBUF could look like and how it might work. Even ahead of the FAST Act, California and Oregon had already moved forward with pilot programs. For my own part, I’m pretty excited to see where it all goes. Some questions I would love to see answered:

(1) How much will people change their travel habits when the way they pay for driving changes so that gas is cheaper, but road use charges are more expensive (or at least, more transparent?)

(2) What might the role of the private sector be in developing and maintaining the technology that enables MBUFs? Might the private sector be involved in administering the fees?

(3) Would private sector involvement contribute to or alleviate concerns about privacy?