Distance-Based Fees (DBF)

The Minnesota Department of Transportation (MnDOT) is demonstrating the feasibility of assessing a user-based fee on Shared Mobility (SM) vehicle fleets. SM includes a range of new travel forms that promise greater efficiency, safety, and enhanced mobility. It also provides a platform to explore a practical and implementable path toward wider deployment of distance-based user fees as a replacement for the motor fuel tax on appropriately equipped vehicles.

By leveraging the advanced technology that has become a standard of SM service providers, MnDOT seeks to develop a user-based fee using existing embedded vehicle technology. This project will prepare Minnesota for the convergence of shared mobility with broad adoption of vehicle electrification as well as coming vehicle automation.

The project has two testing phases

• Phase I – Pre-Deployment Planning and Proof of Concept: Pre-deployment planning and a short, focused test to verify that DBF-related data can be accurately and securely transferred between a shared mobility provider, an Automated Vehicle, and state agencies like MnDOT and Revenue.
• Phase II – Demonstration: A larger-scale deployment of DBF to demonstrate feasibility on a broader scale, capture public opinion, educate Minnesota residents, identify organizational and administrative gaps, and to identify key considerations to address moving forward.

Demonstration Goals. The demonstration is intended to confirm that distance-based user fees can be efficiently and effectively collected using vehicle technology already embedded in shared mobility fleet vehicles. The successful completion of the demonstration will validate the following goals:

• Equity: Ensures all drivers pay a fair share for use of the roads;
• Public acceptance: If DBUFs are viewed as a solution, more travelers will support it;
• Privacy protection: Stringent security protocols must protect personal information;
• Ease of payment and collections: Ideally, a system with low administration costs that uses existing technologies;
• Transparency: Use and fee data readily accessible as needed;
• Low evasion rates: Vehicle-embedded technology and encrypted transmission ensures low avoidance; and
• Scalability: DBUFs incrementally implemented as data collecting technology is more widely available for vehicles.

Demonstration Objectives. Specific objectives to meet the goals of the demonstration are:

• Develop a scalable, secure and transferable approach to user-based fees that can be adopted widely and cost-effectively;
• Leverage partnerships with SM providers to demonstrate DBUF collections with existing onboard technologies that minimize collection and enforcement costs, as well as enhance user privacy and equity;
• Demonstrate how DBUF accounts from SM providers could be seamlessly integrated into existing Minnesota financial reporting, auditing, and enforcement systems;
• Confirm reliability and security of shared mobility data and financial systems, and integrate with state fee collection systems;
• Explore ways the nexus between connected and automated vehicles (C/AV), vehicle electrification, and SM ownership models can be used to promote a more sustainable transportation funding mechanism;
• Through targeted messaging and outreach, educate Minnesota’s public and policymakers as to the decline in transportation funding, shared mobility’s contribution to the problem, and how SM providers can be incorporated within a collaborative DBUF solution;
• Establish appropriate pricing structure for various parameters, such as vehicle classes, times of day, and other variables; and
• Develop a blueprint that charts a path forward to validate the feasibility of distance-based user fees.

Privacy. Building on knowledge from two previous demonstrations, Minnesota is launching this DBF demonstration to show how an efficient and rational DBUF collection system could be used to charge certain vehicles by miles driven. This year long project will ultimately demonstrate a user-based fee with fleet-operated, shared mobility service providers such as carsharing and automated vehicles (AVs).

Many states have struggled conducting DBF studies due to privacy concerns and protection of personally Identifiable Information. Privacy protection, data sharing and any data reuse agreements are already in place between the shared mobility providers and their customers. Minnesota will not require or receive any customer-specific data from the shared mobility providers to assess the DBF pilot. The state will only receive a summary of generic aggregated travel data already collected through the agreements listed above.