Norbert Schindler reports on the continuing transformation of the electronic tolling scene in Europe
When I set up my own consulting company in 2017 I kept a cardboard box next to my desk that contained a collection of notes, articles and presentations on tolling that I had assembled over the past 15 years. I recently took the time to go through some of this old material - this proved, at times, to be quite an amusing exercise. For example, I found a copy of a presentation from a leading tolling technology company making the case for microwave technology in nationwide tolling schemes.
A list of advantages of DSRC technology was followed by a list of “risks” of satellite-based (GNSS) technology in tolling. In order to underline the level of “danger” of GNSS technology, a photograph of someone’s hand holding a bloody knife was placed next to the list on the slide. Once the German satellite scheme started operating in 2005, the “technology debate” indeed led to some heated discussions at a number of European conferences. In the meantime, of course, that company which was so averse to GNSS technology at the time now offers satellite-based solutions as well.
I also came across one of my presentations from 2005 where I anticipated a significant motivation for the widespread use of GNSS-based tolling once the Galileo Satellite Navigation System became operational - in 2007. To be honest, I was not convinced back then that it was really worth spending billions of Euros of tax money on a new European system since GPS already provided the positioning information that satisfied our purposes for distance-based tolling. In the meantime, I am convinced that Galileo was an extremely valuable investment: it is the first satellite navigation system operated by a civilian organization (and not a military superpower).
At a time when the US President and Commander in Chief could, theoretically, shut down GPS services (over parts of Europe, for example) as readily as he can tweet about “fake news,” it is comforting to know that we now have a robust – and highly accurate – satellite navigation system that we can always rely on. Galileo is at last operational, with 26 satellites already launched into orbit at the end of 2018 and the full constellation to be completed in 2019.
WHY ARE WE WAITING?
Looking back more than a decade, many of us in the tolling business (myself included) would have expected that by now, a majority of European countries would have implemented nationwide tolling systems. Austria and Germany led the way for multi-lane free flow tolling 2004 and 2005, respectively. Whereas Austria deployed DRSC technology for its truck tolling system on all 2,000 km (1,250 miles) of national motorways, Germany chose to develop a GNSS-based approach to charge the distance-based fees on its Autobahn network of 12,000 km (7,500 miles). These distance-based schemes in the heart of Europe were a brilliant demonstration of national road authorities being able generate the level of revenue essential for the maintenance and development of an excellent road network. Furthermore, when these tolling policies were introduced, they enjoyed a high level of acceptance – both by the general population and by the transportation sector.
There are now eight states in the European Union that have established nationwide distance-based charging schemes for heavy goods vehicles, with Slovenia (pictured) being the most recent country to deploy a truck tolling system in 2018. That’s a respectable number of countries, of course, but you would think there could have been more by now. In 2008, United Kingdom would have gone live with its “Lorry Road User Charge” scheme had it not cancelled the project during the procurement phase. The Netherlands were about to implement a highly ambitious tolling scheme for all vehicle on all roads, after many years were spent designing the system, only to cancel the process in 2010. A few years later, France had built the most advanced tolling solution in the world, fully operational and paid for! But in 2013, the écotaxe system was “suspended indefinitely”, causing a significant setback to the European tolling industry – and costing the French taxpayers €1 billion.
Over the past two years, though, we have witnessed a major development in Europe – something I would call the beginning of the European Tolling Revolution. This “upheaval” has, however, been very long in the making – led by the vision of European lawmakers in Brussels and a handful of tolling industry professionals. The basis of the European Electronic Toll Service (EETS) was written into law by European Directive in 2004, and was defined five years later by the European Commission’s Decision 2009/750/EC. The anticipated launch of EETS in 2011 was, however, overly ambitious. Not a single European toll service provider appeared on the landscape.
Thankfully, Belgium picked up on the initiative that France had pushed forward through the implementation of its écotaxe scheme. In 2016 Belgium became the first country to launch a nationwide tolling scheme that accepted an EETS service provider (Axxès of France) from the very beginning. Since then, in a little over two years, six more companies have become registered as EETS service providers in Belgium! These new EETS providers will be offering their services not only in Belgium but in a majority of the countries that have nationwide tolling schemes – now that the door to EETS service providers has finally being opened.
“I am convinced that Galileo was an extremely valuable investment: it is the first satellite navigation system operated by a civilian organization and not a military superpower”
Of course, the standardization of DSRC microwave technology in Europe has played a significant role in the advancement of EETS. In my view, though, the real potential for establishing tolling throughout Europe has been unleashed by the advancement of affordable and accurate satellite-based solutions. With the re-deployment of the Russian GLONASS in 2011 and the European launch of the GALILEO system in 2016, we can take advantage of multi-constellation GNSS – with three reliable global navigation satellite systems offering excellent coverage. Leading chipset manufacturers now offer cost-effective multi-constellation satellite receivers that use all these three GNSS systems. Thanks to the civilian-operated Galileo system, Europe now has a solid foundation upon which countless services in the transport sector can be offered – reliably and independently. In the words of Dr John Walker, editor of the 2018 book Road Pricing: Technologies, Economics and Acceptability, “GNSS is now a mass-market technology with a much-reduced per-vehicle cost”. Due to the unprecedented deployment of GNSS receivers in smartphones (and other devices) around the world, excellent positioning solutions are being provided at an exceptionally low cost.
This new development is truly transforming the electronic tolling industry in Europe – a move away from the national tolling “monopolies”. National Toll Chargers have, until now, required the registration of each vehicle using the tolled road network within their borders, and have made the use of their proprietary tolling solutions compulsory. It has been a great burden on truck drivers (and the international transportation companies they work for) to have to register their vehicles and install an OBU in each country they drive through. Soon, this enormous overhead for road users will become history. More importantly, at least for those of us in the tolling industry, this revolution will provide new opportunities to the companies that provide the technologies and the services that form the backbone of these national tolling systems.
By breaking down the value-chain of tolling technologies and services, vendors can focus on their core business of providing hardware, software, or services. This development will be a relief for many tolling technology vendors that, until now, needed to invest in years of research and development - in the hope of winning one of those large contracts, of which there haven’t been so many in the past decade. In the 15 years since the tender for the German Truck Tolling Scheme, there have been an average of one tender per year for similar tolling systems in Europe. Nearly half of those tenders were cancelled, resulting in significant losses for the technology companies that participated in the procurement process.
Tolling technology suppliers will no longer need to maintain large bid organizations that orient themselves around monumental national procurements; they can focus on their core competences and offer solutions to the EETS providers that are now emerging throughout Europe.
“These distance-based schemes in the heart of Europe were a brilliant demonstration of national road authorities being able generate the level of revenue essential for the maintenance and development of an excellent road network”
Thanks to the EETS revolution, new nationwide tolling schemes will no longer require investments in the range of half a billion to a few billion Euros. In 2017, Bulgaria awarded a contract for a mere €75 million (150 million LEV) to create its own tolling scheme. For the first time, a national tender for a tolling system did not require the purchase or distribution of any OBUs. Instead, Bulgaria anticipates that EETS service providers (and local fleet management providers) will provide the tolling OBUs to their respective customers, also taking care of all the customer-related tasks such as registration, OBU distribution, billing, etc. We will soon witness a variety of technologies and services in this new tolling landscape, in which specialized vendors will emerge:
- On Board Unit Hardware: robust windshield-mounted devices that support both microwave DSRC and GNSS tolling technologies, enabling secure GSM communication to a proxy (server), and providing access to toll transaction data to the enforcement authorities of the Toll Chargers (via standardized DSRC interfaces).
- Tolling Software: solutions that operate on the OBU and proxy hardware, to reliably and efficiently collect and store the trip data in a given toll domain, thus forming the basis for calculating the fees for each trip on the tolled road network.
- Map Matching Services: solutions for detecting the distance-based fees, based on the requirements set forth by the Toll Charger in specific Toll Domains. This service is already being offered to EETS providers operating within the “Viapass” system of Belgium.
- Geographic Information System (GIS) Specialists: companies that capture, store, and manage up-to-date geographic data that form the basis with which toll-relevant travel data can be determined. Such companies have already been selling mapping and location data for use in navigation devices and smartphones, for example. Map Matching services, for example, rely on GIS data.
- Tolling Front-End Providers: companies that could combine all of the above, with a business model very similar to that of a GSM network provider. Such a company could provide the OBU hardware, data communication between the OBU and the proxy, toll section recognition, and potentially other (location-based) services for a monthly fee, for example.
- Payment Service Providers: companies specialized in handling the registration, distribution of OBUs, and automatic payment of toll charges in all Toll Domains. They would be the typical clients of the Front-End Providers. The fact that 10 of the 15 members of AEITS, the Association of Electronic Toll and Interoperable Services (http://www.aetis-europe.eu/) are fuel card providers is a clear indication that before long, most EETS service providers will be (experienced) payment service companies.
TO THE POWER OF ONE
Although the EETS concept of “one contract, one OBU” has not yet become reality, we have come much closer to reaching this goal over the past year than ever before. None of this would have been possible without the vision of policy makers and the innovation of the technology vendors that led to the launch of pioneering tolling systems in Switzerland, Germany, Slovakia – and, at last, Belgium, which finally unleashed the full potential of EETS. The future for tolling looks brighter than ever. For the technology vendors in this field, it has been very demanding to survive in this challenging market – with only a few GNSS-based tolling schemes being installed over the past decade, and many cancelled projects in between. But many new opportunities lie ahead, and we can look forward to navigate these new paths, with the guidance of increasingly more accurate and cost-effective satellite-based equipment.