Summary: Last week Randal O’Toole  wrote that “Compared with [technology police officers have to scan license plates], privacy concerns over such things as self-driving cars or [vehicle miles traveled] pricing seem tame.”

In a 2012 Cato Institute Policy Analysis, O’Toole proposed

an affordable vehicle-mile fee system that preserves traveler privacy, eliminates nearly all traffic congestion, adequately funds all federal, state, and local roads, and does so in a revenue-neutral manner after eliminating gas taxes and local road subsidies. …

In full implementation, the GPS device

could keep track of how much each vehicle

used roads owned by cities, counties, states,

and private parties, resulting in separate charges for each. This would allow all road owners

to collect fees for actual use of their roads. The

fees could vary for each road depending on the

cost of that road relative to the total usage of

the road. Fees on uncongested roads would be

fixed in cents or fractions of cents per mile; on

congested roads, fees would vary by time of

day or dynamically change by the amount of

congestion with the aim of keeping flows at or

below 90 percent of the maximum flow capacity of the roads.

In full implementation, the GPS device could keep track of how much each vehicle used roads owned by cities, counties, states, and private parties, resulting in separate charges for each. This would allow all road owners to collect fees for actual use of their roads. The fees could vary for each road depending on the cost of that road relative to the total usage of the road. Fees on uncongested roads would be fixed in cents or fractions of cents per mile; on congested roads, fees would vary by time of day or dynamically change by the amount of congestion with the aim of keeping flows at or below 90 percent of the maximum flow capacity of the roads.

The GPS meter would update the schedule of fees daily (or more frequently in the case of dynamically priced roads) over the cell phone, wireless internet, or other wireless network. When a specially equipped gasoline pump nozzle is inserted into the car, the GPS meter transmits to the pump how much money the motorist owes to each of the owners of highways, roads, and streets the car used since the last fill-up. The motorist pays this amount in lieu of a traditional cents-per-gallon gas tax.

During travel, the GPS devices are likely to offer real-time information on how much motorists are spending to drive on particular roads. Prior to travel, motorists could consult their computers or GPS devices to find the cost of particular routes, including alternative routes or times that may cost less.

This system can preserve traveler privacybecause the only information transmitted to the gas pump is the total cost of road usage per roadway owner (e.g., state, locality, private provider), not when or which roads were actually used.

O’Toole describes a pilot program:

The state of Oregon has successfully tested the vehicle-mile fee concept on a small number of vehicles. In the test, about 200 volunteers had Global Positioning System (GPS) devices attached to their cars. The devices kept track of how many miles the vehicles traveled and on what roads. The state also equipped a number of gasoline stations with special pumps capable of detecting and communicating with the GPS devices.

When the operator of one of the test vehicles purchased gasoline at one of the special stations, the GPS device transmitted to the pump how much money the operator owed based on how many miles the vehicle had driven since its last fuel purchase. The only information transmitted to the pump was the total charge; information on when and where the vehicle was driven was not transmitted nor, in the Oregon experiment, even stored in the on-board GPS device.

A report by the RAND Corporation also outlines how a VMT pricing can be achieved without threatening privacy.

But people are still concerned about VMT pricing and privacy, as illustrated by a recent op-ed by Mark J. Perry at the Amercan Enterprise Institute. Perry suggests raising the per-gallon fuel tax, and does not mention how wasteful and unjust this the fuel tax is. Nor does Perry consider all-electronic tolling, which raises fewer privacy concerns than pricing using a GPS device.

Randal O’Toole responds to Perry in a recent blog post: Stop Using Privacy Concerns to Hide Behind Your Fear of Change. The post begins:

Police cars today have cameras that can scan the license places on every car they see. Plate numbers are transmitted to a central computer and if a number is flagged as wanted in any way, the police in the cruiser get an alert and they can pull the car over. That sounds reassuring but it also represents a potentially serious invasion of privacy.

Compared with this, privacy concerns over such things as self-driving cars or VMT [vehicle mileage traveled] pricing seem tame. Yet conservatives manage to freak out over potential invasions of privacy by Google’s self-driving car as well as by proposals for VMT pricing.

Read more.

Related article by Robert Poole:

Economists vs. Realists on Mileage-Based User Fees: Finding the best way to replace gas taxes with mileage-based user fees.