Software

How Blockchain Can Help Toll Collection Systems

Blockchain-based solutions can potentially make toll collection easier and more efficient.

David Smith is an independent consultant for The Smart Card Institute, and a cryptographer with 12 years of experience in both the public and private sectors. He is working on his second startup (currently in stealth mode), which will track and interpret the use of contactless payments in the Greater China region. He splits his time between Singapore and San Francisco.

When traveling across states or over long distances, people all over the world are required to pay tolls toward road, bridge, tunnel and other infrastructure usage. A toll is merely a fee introduced to recoup the cost of road construction and maintenance.

Some may think the tollbooth system could not be more than 100 years old, because before that people used horses for travel. In reality, toll roads have existed for at least 2,700 years, stretching back to ancient Syria and Babylon. Even in 1840, there were 1,000 turnpike trusts managing 20,000 miles of road in England alone, according to Dan Bogart, a professor of economics at the University of California, Irvine. In those days, tolls were levied on passing travelers on foot, wagon or horseback. In today’s world, people use freeways and sometimes travel between states, even for their daily work.

Toll plazas have mostly become an invisible part of the journey, except when there is a long wait involved. Instead of cash, most tollbooths have modernized to accept credit and debit cards or smart cards for faster transactions.

In most implementations, vehicles are equipped with an automatic radio transponder. Roadside toll reader devices can communicate with this radio transponder and register a vehicle’s use of the road when it passes by the toll reader. The electronic payment system then charges the toll to the registered user of the vehicle.

This method has proved to be not only faster but also cheaper for the government as the cost of staff to collect manual toll is reduced. Electronic toll lanes can also operate alongside manual lanes so vehicles not equipped with the radio transponders can use the tolls.

Blockchain Can Make Toll Collection Even More Efficient

As StateTech has previously reported, state governments are experimenting with blockchain to protect and secure data. Blockchain provides a secure and transparent mechanism to make, record and verify any type of transaction.

Security is especially important in payment transactions. Blockchain smart contracts can be used to exchange anything of value without the services of a middleman. They can also be used to define and enforce rules and penalties as agreed on in a contract between two parties.

Different researchers have proposed the introduction of an electronic toll collection system with enhanced security and interoperability provided by blockchain.

In a research paper published this year in the International Journal of Engineering and Advanced Technology, a group of researchers proposed the use of radio transponder devices similar to those used in electronic toll collection. The toll readers in this case would communicate with a centralized blockchain based system consisting of a database of registered vehicles, the definition of the smart contract and ledgers containing the transaction information of enrolled vehicles and users.

Toll payment itself can take place through a cryptocurrency e-wallet that has an address based on the smart contract. The vehicle owner can add credit to this wallet with the cryptocurrency supported by the toll agency.

This method is faster for drivers and makes sending and receiving transaction data easier and more secure for state and local toll agencies. Distributed ledgers ensure the transaction data has not been tampered with and that all agencies involved, including state and federal government agencies, have the same account of transactions.

Another proposal from a group of Canadian and Chinese researchers combines blockchain with edge computing to improve the quality of service for time-critical transactions. Here, each toll operator can be viewed as operating edges, thus the toll collection system comprises multiple heterogenous edges.

Immutable and open source blockchain smart contracts enable a transparent profit distribution scheme among the multiple operators. Cryptocurrency allows operators to use a “unified, fine-granularity, and transparent pricing method” for charging users, according to the paper.

“The blockchain-based toll system can minimize the cost for both providers and the users, given the business rules are well-defined: there will be no centralized operators to pocket the difference as its profit,” the paper’s authors continue.

Meanwhile, Project Vento, a collaboration between Dallas-based Oaken Innovations, toll road operator Brisa, technology company A-to-Be and consumer company Via Verde, is a blockchain-powered automotive commerce platform. The implementation is similar to that of other projects in this space and uses cryptocurrency tokens for payment. It enables instantaneous remittance from user to operator and provides streamlined and transparent transactions among operators.

Tolling.network is another implementation of this concept that aims to solve the problem of national interoperability in the U.S. toll industry using blockchain. It is a distributed ledger solution that uses hyperledger fabric for toll interoperability. It provides a next-generation network for agency-to-agency national interoperability and cross-border interoperability.

The humble tollbooth has come a long way. Blockchain will be able to make the exchange of toll payments faster and smoother from both a user and an operator perspective and improve the communication of data and value between operators at the state and national level.

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