Takeaways from RUC USA Conference: Will RUC replace or supplement the gas tax and become our future road funding mechanism?

At the RUC USA Conference, held in Miami, Florida on June 13 & 14, the multi-billion-dollar question was: Will RUC replace or supplement the gas tax and become our future road funding mechanism?

Context: The past and present, Gas tax; And the future, RUC?

Admittedly the gas tax has its advantages. It is extremely inexpensive to collect. It does not compromise your privacy or data. However, it has one massive disadvantage, which it is not likely to overcome. It is dependent on the sale of gasoline (and diesel) for automobiles and automobiles are becoming increasingly fuel efficient and electric. The result is a funding source in decline.

Road Usage Charging (RUC) is an alternative funding mechanism that many states have begun exploring to supplement or even replace the gas tax. RUC is based upon the principal that motorists pay for the miles they travel. Over the past few years, 38 states have created voluntary RUC programs, run pilots, or initiated studies. The federal government is expected to soon launch a national pilot.

Despite the progress, RUC is still not yet a serious challenger to the gas tax. It is arguably the areas where the gas tax has its greatest advantages–cost, and privacy–that RUC has struggled the most. However, the situation is changing as RUC enabling technology improves, states explore more cost efficient and secure RUC options, and electric vehicle usage accelerates meaning less revenue from the gas tax.

What we learned at the RUC USA Conference

The two-day conference dived deeply into the world of RUC, exploring its past, present, and contemplating its future. The European model was presented along with lessons learned and their application to the United States market. State DOT’s offered up details on their studies, pilots, and programs. Consultants and industry organisations presented alternate visions of the future.

While some answers were provided, we also saw that it is the questions that are pushing the market forward. Questions such as:

• What are the state’s objectives?
• Which vehicles will pay and which are exempted?
• How much will a user pay and how will the road charge be calculated?
• What type of technology will be used in collection? If mileage reporting devices, will they be GPS enabled?
• How is privacy to be maintained?
• How much will the program cost?

As more studies and pilots are completed and new programs progress, we will need more and clearer answers along with fewer questions. Though I personally believe there is still time and this thinking is consistent with the overall messaging at the conference: “RUC can work but needs a lot of work.”