Genesis of a Tolling Marketplace with Third-Party Solutions

August 6, 2021
John O’Neill, PMP &

The number of roadways converting to electronic tolling is increasing. Technological improvements have led more states to operate fully automated toll systems to collect fees. That means a greater burden on tolling authorities to manage the billing and other administrative functions that occur when they collect fees from users of their systems.

Tolling authorities independently manage elaborate solutions to collect tolls from road users that are not preregistered. The challenge for toll authorities is to improve the rate of collectability without having to implement these elaborate solutions that can be costly to implement and maintain. The typical cost elements associated with collecting from unregistered road users are printing costs of invoices/violations, postage, lockbox operations, credit card fees, and handling of calls/disputes.

These cost elements may be reduced or minimized through the utilization of third-parties who would handle the relationship with road users and would be a direct cost saving for toll authorities. Since we are currently replicating this burden by 50+ toll authorities across the country, the expenditure in maintaining or engaging the third-parties can be significantly lowered if they come together to seek a common solution – the volume/scale of transactions would entice the third-party providers to participate.

Conceptually, the third-party companies that guarantee the toll would be allowed to participate in the Tolling Payment Marketplace. Third-party companies should maintain their road user customer information in the marketplace, as this information would be consumed by toll authorities to match the unregistered road user transactions and assign them to a third-party for payment. The third-parties collect the money from road users based on preestablished terms when they onboard the road user into their system.

A centrally managed tolling marketplace that can host third-party providers will eliminate the need for each toll authority to bear the full cost of integrating and maintaining a third-party solution. The toll authorities may continue to utilize their current back-office systems for collecting tolls, providing customer service for registered road users, and using the marketplace of the third-party providers for collecting the tolls from those that are unregistered. Multiple third-parties competing for these transactions will likely provide a highly competitive, low-cost model for road users as they will have a choice to use the most cost-effective or value-added provider.