Use business and functional requirements to guide technology selection for a road pricing program and understand that the technology selected initially evolves over time.
Experience from road pricing programs in Europe and Asia
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Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore


Road pricing projects have been implemented in many parts of the world, notably in the Czech Republic, Germany, Singapore, Sweden, the United Kingdom, and the Netherlands. A scan team from the United States traveled to Europe and Singapore to meet with transportation officials involved in implementation of road pricing programs and to learn firsthand about their approaches and practices.

The scan tour was sponsored by the American Association of State Highway and Transportation Officials (AASHTO), the Federal Highway Administration (FHWA), and the National Cooperative Highway Research Program (NHCRP). The 10 members of the multidisciplinary scan team included transportation professionals from four State departments of transportation (DOT), one regional transportation agency, FHWA, the Federal Transit Administration (FTA), and private industry.

The team met with officials from Berlin, Germany; the Czech Republic; London, United Kingdom; Singapore; Stockholm, Sweden; and The Hague, Netherlands, from December 7 to 18, 2009. The face-to-face visits enabled participants to gain a deeper understanding of each host country’s history and context, the goals and objectives that were established, how road pricing was designed to address transportation and policy objectives, and the hurdles that were faced and how they were overcome. The exchanges provided an opportunity to gain in-depth understanding of program goals and methods, implementation costs, benefits, transportation impacts, revenue generation and use, operating and technical practices and their costs, financing approaches, effects on safety and the environment, and public acceptance.

Much like the U.S. experience, overseas road pricing projects have been met with considerable resistance and political and public debate. International examples indicate that public acceptance and approval of pricing programs improves significantly after project implementation, when the benefits and impacts can be weighed in tangible terms based on the context of its application. Based on discussions and observations made during and after the scan, the scan team developed a series of lessons learned.

Lessons Learned

Congestion pricing programs face political, institutional, and public acceptance challenges and concerns throughout the world. Over a 12-day period, from December 7 to 18, 2009, a multidisciplinary scan team from the United States met with experts in Europe and Asia to gain an understanding of the factors that contribute to successful implementations of road pricing. Based on their perspective of road pricing operations in several countries, the scan team offered the following lessons learned on project requirements and technology selection.

  • Use business and functional requirements to guide technology selection. Several pricing programs realized benefits by following a requirements-based approach to program development and systems design. Countries that had business, functional, and technical requirements at the core of their procurement processes tended to be more successful in engaging public and private partners and achieving program objectives.

    Germany: The Germans chose GPS-based technologies to meet their business requirements of an easily expandable and scalable priced roadway network. The functional requirement that on-board units (OBUs) be managed remotely with downloadable roadway location networks and tariff schedules drove the technology selection.

    Czech Republic: The Czech Republic opted to prioritize the implementation schedule as a critical consideration. As a consequence, the Czechs chose an off-the-shelf DSRC/radio-frequency identification system, which was rapidly deployable. Relatively high unit costs and a long-term contract constraint have given the Czechs a reason to explore alternative technologies as they plan to expand the pricing system to new roadways.

    Singapore, The Netherlands: Addressing privacy protection and the perception of privacy was a key consideration in Singapore and in the plans for The Netherlands. In Singapore, privacy concerns were mitigated by a requirement for OBUs to accept a stored-value smart card as the payment mechanism. Since the prepaid smart card is portable and does not hold any personal data, an individual’s privacy is protected. Similarly, the Dutch system planners plan to require a trusted element as a feature for privacy protection.

  • Understand that the initial technology applications often evolve after implementation, particularly with the experience of full-scale operations.

    Sweden: Stockholm migrated from a dual-payment system, which employed both transponders and a video toll collection system, to one that relies solely on ANPR (automated number plate recognition). The dual-payment methods, used during the demonstration phase, were costly to operate, but the Swedish tax law also required that the Stockholm congestion tax system capture photos of all license plates. After the demonstration period, when the system was permanently reopened, the transponders were phased out in favor of an ANPR-based system, and also allowing the conversion to a monthly billing statement rather than requiring users to pay per trip.

    Singapore, London: Singapore migrated from a paper permit to a transponder-based system and is now exploring GPS technologies. London is also reviewing its ANPR-based charging techniques to find ways to reduce the operational costs of the system.

  • Beware that requirements that add complexity to the collection system also have significant impacts on costs.

    Singapore: A fundamental decision in Singapore was to require an OBU (on-board unit) in every vehicle, which greatly simplified technology requirements and kept the ongoing operating costs low.

    Germany: While only 10 percent of transactions in the German system are manual, they account for over one-third of the total operating costs.

    Stockholm: The Lidingö Rule in Stockholm, which exempts certain vehicles from the congestion tax, added substantively to the systems development and processing requirements to handle the complexity of the decision algorithms required to check for exempted through-traffic movements. The increased complexity has added significantly to capital and ongoing operating costs.

  • Anticipate challenges in achieving interoperability of road pricing systems among countries.

    European Union: Interoperability of road pricing systems among European Union member states has been a challenge. The European Union has adopted Directive 2004/52/EC, which outlines requirements for member countries to adopt interoperable standards (i.e., EETS) for electronic tolling that allow a vehicle to pay road-user fees anywhere in the European Union via one contract and with one OBU. However, technical, administrative, and legal hurdles have made advancing interoperability time consuming and challenging. The European Parliament and European Union Council approved the directive in 2004, and five years later in 2009, a decision on the EETS definition.

    While interoperability may be viewed as a technological concern, it interfaces with a full range of business, administrative, financial, and legal issues. Establishing standards is a critical first step, but ultimately interoperability will require multi-disciplinary approaches. Existing systems with large sunk costs in proprietary applications and equipment heighten the challenge of transition.

Road pricing programs implemented in Europe and Asia offer important lessons on the use of market-based approaches to address traffic congestion and improve mobility. European experience shows that the business and functional requirements serve to guide technology selection; the technology selected initially may not meet requirements over time; increasing system complexity increases costs; and achieving interoperability of road pricing systems among counties remains a challenge to overcome.

Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore

Reducing Congestion and Funding Transportation Using Road Pricing In Europe and Singapore
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Robert Arnold, Vance C. Smith, John Q. Doan, Rodney N. Barry, Jayme L. Blakesley, Patrick T. DeCorla-Souza, Mark F. Muriello, Gummada N. Murthy, Patty K. Rubstello, Nick A. Thompson
Federal Highway Administration, U.S. DOT
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System Engineering Elements