In November, President Biden signed the most extensive infrastructure bill in U.S. history. This bill will allocate 1.2 trillion dollars towards improving our roadways, bridges, ports, and other transportation infrastructure. This bill has been a long time coming, as politicians have been discussing significant actions in response to our nation’s crumbling infrastructure for the last couple of decades. Naturally, an infrastructure bill of this degree will have a substantial impact on the trucking industry. Josh Fisher explores this impact in his article “What the Largest Infrastructure Spending Bill in History Means for Trucking.” One of the highlights of this article is that President Biden’s infrastructure bill includes a vehicle mile traveled pilot program, which is an infrastructure initiative that many have been suggesting for a long time. This article will discuss what a vehicle miles traveled program is and how it will affect fleet businesses.
What is a Vehicle Miles Traveled Program?
A vehicle miles traveled program is a method of funding our nation’s infrastructure initiatives. Under our current program, funds for infrastructure projects come from the Highway Trust Fund, which gets its money mainly from the gas tax. However, the gas tax simply isn’t enough anymore to keep up with our nation’s infrastructure needs. There are a couple of reasons for this.
The first reason is that the gas tax hasn’t kept up with inflation in at least 25 years. This means that the gas tax is worth 40% less than a quarter of a century ago. During these 25 years, our population has only grown, meaning more wear and tear on our roads and not enough money to repair the damage done.
Another problem is that even though more vehicles are on the road, fewer vehicles are paying the gas tax, or at least paying as much gas tax as needed to correlate with the damage they inflict on the road. This is because many vehicles these days are electric or fuel-efficient. These vehicles don’t use as much fuel as regular vehicles, but they still inflict just as much wear and tear on the roads—another reason our roads are deteriorating faster than we can repair them.
A vehicle miles traveled charge eliminates both of these problems. It is a program in which drivers are charged based on how many miles they drive instead of how much fuel they consume. It has already been implemented in Oregon and Utah, and many other states have done pilots to test out how it would work for them. The programs have been successful so far, and vehicle miles traveled programs are looking like a viable way to solve our nation’s infrastructure problems in the long term.
How Do These Programs Work?
As we mentioned previously, vehicle miles traveled programs, or road usage charging programs, have already been tested in other states to great success. The states that have fully functioning programs are Oregon and Utah, and both of their programs work very similarly. This section will discuss how their programs work, as they will likely be a model for future programs.
Both states have voluntary programs for owners of fuel-efficient or electric vehicles. For example, to enroll in Oregon’s program, a vehicle must meet the following requirements:
- Light-duty
- 20 miles-per-gallon or better rating
- Registered to an Oregon resident
In Oregon, drivers pay 1.9 cents per mile, and in Utah, drivers pay 1.5 cents per mile. Each state uses a different system to track miles. Oregon uses Azuga Insight, and Utah uses DriveSync technology. Both programs work very similarly, so we will discuss how Azuga Insight works.
For Azuga Insight, a driver simply plugs a device into their OBD port in their vehicle, which most vehicles built after 1996 have. Then, as they drive, the device automatically reports how many miles they drive and deducts money from a wallet that the driver sets up online. Everything is automatic, so there is no need for extensive administrative staff to track everything. It’s effortless to manage. Then, drivers are refunded the money they pay towards the gas tax as they go. Very soon, there will also be other non-device options for reporting mileage, such as a manual entry method.
The Benefits of Vehicle Miles Traveled Programs
There are many benefits to road usage charging that states consider. This charge aims to resolve the issues brought about by the gas tax and sustain infrastructure far into the future. We will discuss the benefits of these programs in this section.
- Safer Roads: Both sides of the political spectrum agree that road safety is of the utmost importance. According to Fisher’s article, about one out of every five miles of our highways and major roads are in poor condition. These conditions cause 22,000 traffic fatalities and 38% of injuries every year. A nationwide road usage charging program would bring in an additional $340 million in funding for our infrastructure, helping improve these roads and keep drivers safe.
- Fair for all Vehicles: In the past, truck-only tax proposals have been criticized for being unfair. Road usage charging is different because it is fair to all drivers, as each driver pays based on how much damage they inflict on the road. Electric vehicles and fuel-efficient vehicles have not paid their fair share towards the Highway Trust Fund, which changes under a vehicle miles traveled program.
- Easy to Set Up: As we mentioned, these programs require very little staffing and effort to set up. Drivers can easily plug the device into their OBD port, and the state doesn’t have to allocate many resources to keep the program going. It’s easy for everyone to implement.
Stay Up to Date on Vehicle Miles Traveled Programs
Azuga is a frontrunner when it comes to this issue, as we created Azuga Insight, the first program used for a vehicle miles traveled program in the country. You can follow updates on all things relating to vehicle miles traveled programs on our blog and Twitter @AzugaInsight.
