Singapore’s new road toll system: Newer isn’t always better


THE Singaporean government has announced plans to introduce a new island-wide electronic road-pricing (ERP) system by 2020. This new system, dubbed ERP 2.0, will make use of satellite-based navigation technology to monitor vehicles and impose distance-based taxes.

Justifying the cost of S$556 million (US$395 million), the Land Transport Authority (LTA) said that the current gantry system “is almost two decades old and will become increasingly expensive and difficult to maintain.” It is also costly and occupies too much space.

The LTA believes that ERP 2.0 will be fairer for motorists because they will be charged according to the distance they travel on congested roads. ERP 2.0 will also grant LTA greater flexibility in managing congestion and changing driving behaviour by allowing it to vary taxes according to timing, distance and location.

However, questions remain about the need for an intrusive congestion pricing system that will cost a hefty S$556 million.

Terence Lee from Tech In Asia asks why so much money is being spent to develop a system that is based on existing technology, especially when Uber has succeeded in doing the same thing. Although I was unable to find exact figures of how much Uber spent developing its own tracking technology, we should note that Uber has an estimated worth of S$88 billion and must most likely have spent a sizeable sum on research (just as it continues to do).

In any case, the competing bid of $1.2 billion by ST Engineering suggests that the tender may have been a competitive one. In addition, the RAND Corporation estimates that a similar Vehicle Miles of Travel system in the United States would require a capital investment of between $1 billion and $20 billion.

A further question should be asked. Do the marginal gains of a more precise congestion pricing system outweigh the costs?

“Singaporeans are concerned that the new device may be used by the government to track their movements.”

Under the existing ERP system, charges are imposed on drivers when they drive past strategically located gantries, of which there are currently 80. These charges vary depending on time and location. Thus, the current ERP system already provides LTA a large degree of flexibility and precision, albeit not as much as satellite-tracking would provide.

The savings accrued from not having to maintain all 80 gantries, and possibly constructing new ones, must also be weighed against the cost of installing sophisticated devices in each vehicle. According to a Straits Times report, the new onboard unit will “alert drivers of priced roads well in advance (before turn-offs to alternatives), inform them of charges, and provide real-time traffic information.”

But smartphones are already capable of performing all these functions. Why are we giving a private company a monopoly to charge us for redundant features that create yet another distraction for drivers?

Certainly, the device will also offer satellite-tracking functionality, but almost all smartphones already have GPS functionality. The only added function provided by the onboard unit is a tamper-proof way to track vehicles, which has in turn raised privacy concerns.

Singaporeans are concerned that the new device may be used by the government to track their movements. Although we are still years away from the implementation of ERP 2.0, LTA should do more to allay fears or risk losing public support for the programme, which would hinder its effective implementation.

Some argue, rather speciously, that because Singaporeans have never opposed intrusions of their privacy by the government, they no longer have the right to insist on their right to privacy. Even if this is true, which it is not, we may argue: Although we do not attach as great an importance to privacy as more liberal nations like the United States do, we do still value the ability to live our lives without undue interference by the state. We also believe that as citizens, we are the nation and we therefore get to decide if we do not want to live under constant surveillance by those we put in charge of running our government.

Mandatory vehicular satellite-tracking, moreover, is quite different from the myriad ways in which we voluntarily give up our information to enjoy services like Uber or Google Maps, most of which adopt tightly crafted privacy policies that the present government has shown no affinity for. Add to that the possibility of data theft and we should be seriously concerned about the kinds of risks uninhibited tracking creates.

Many states in the United States have already tested similar Vehicle Miles of Travel taxation systems since 2005, and they have developed innovative ways to protect the privacy of individuals while still creating an efficient tracking system. Possibilities include separating the driver’s personal information from the data that is uploaded, imposing strict limits on access, and destroying the data after 30 days. There is no reason why Singapore should seek to create a world-class congestion pricing system only for it to fall short because of a lack of foresight in understanding the importance of privacy.

There are many other potential problems with ERP 2.0. These problems, however, are problems of implementation, not problems which are inherent to the system. Careful planning should therefore allow us to avoid these problems or at least significantly mitigate them.

“The government has provided little evidence that demonstrates that ERP 2.0 will work more effectively than the current one.”

First, prices which only take into account distance travelled will disproportionately hurt taxi drivers, truck drivers and bus operators. To avoid this, different rates should be levied for different road-users.

Second, the new system will benefit some while hurting others. Although it may be more economically efficient on the whole, motorists are unlikely to see things that way. It is more likely that those who benefit under the current ERP system will see the new system as unfair. There are no easy solutions here. The government must simply be more transparent and accountable so as to attenuate the sense of exploitation that Singaporeans increasingly feel.

Third, the salience of charges for road usage is lost when the monstrous gantries go. The economists Lew Yii Der and Leong Wai Yan point out in a paper that “if payment is decoupled from consumption, i.e. put in separate mental accounts, the perceived cost of consumption is reduced and this encourages more consumption, as in the case of the credit card.”

The ERP gantries, they argue, “raise motorists’ awareness of the actual cost of a trip and help them make a considered decision, for example, whether to shift some trips to a less congested time period where the ERP charges are lower or zero.” Just like swiping a credit card then, ERP 2.0 removes the visual reminder of expenditure that gantries provide. Higher and more precise road taxes may, counterintuitively, therefore not be as effective as the monstrous gantries.

So far, the government has provided little evidence that demonstrates that ERP 2.0 will work more effectively than the current one (and if it does possess that evidence, this is yet another reason why it should be more transparent about it). Why then is it rushing ahead? Apart from wanting to remove the politically costly, ubiquitous reminders of government taxation (the gantries), I believe the government continues to pursue technical rationalisation dogmatically. Greater efficiency and greater precision, aided by advances in technology, are assumed to be the tools of good governance. Alas, ERP 2.0 may prove them wrong and we will all pay the price.

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