Key Drivers of Road Usage Charging (RUC) in the United States
The motor fuel tax is the most important funding source for surface transportation in the United States and over the past few decades, it has significantly declined. At the federal level, the last tax increase was in 1993 and only a few states have this tax indexed to inflation. As well, average fuel efficiency of motors vehicles has continually increased while electric vehicles have grown in popularity, further reducing fuel tax revenues. These falling revenues in combination with an aging road infrastructure in need of maintenance and upgrading has created a need for a better source of road funding. One such funding alternative which has seen a rise in use and testing of late is road usage charging (RUC). But what are the key drivers of road usage charging in the US and why does it appear to be favoured over other methods?
The adoption of RUC in the US began in 2001 when Oregon created a Road User Fee Task Force (RUFTF) and in 2006, launched the first RUC pilot in the United States; interestingly, Oregon was also the first state to implement a fuel tax, in 1919. Since Oregon launched that first RUC pilot, 37 other states have either commissioned studies, participated in pilots, or established programs. This broad adoption and testing can be attributed to the advantages RUC has over other funding alternatives. The three primary advantages RUC has over other funding alternatives are:
- RUC follows the pay-per-use principal (versus general funding sources)
- It is scalable at lower cost (versus traditional tolling)
- It has potential to provide flexible pricing
The 4 key drivers of Road Usage Charging in the US
While there are four main drivers for the adoption of road usage charging in the US, these are closely linked and cannot be fully isolated. They include:
Financial & Economic factors – Transportation and highway funding
The evolution of mobility – Increased vehicle fuel efficiency and mass adoption of electric vehicles
Road infrastructure needs – Poor condition of roads and bridges and need for expansion and modernisation
Political & Regulatory Advances – State & Federal legislation
To learn more about RUC see our follow-up articles on each of the key drivers of road usage charging in the US (linked above) or review our in-depth market research reports on RUC and ETC.