VDOT Proposes Gouging E-ZPass Customers

The Virginia Department of Transportation is seeking to raise money for toll roads through a user tax on their best customers.

The Virginia Department of Transportation (VDOT) is seeking to raise money for toll roads in Northern Virginia through a user tax of the electronic payment service E-ZPass. Here’s a notice they emailed me:
With Virginia’s E-ZPass program doubling over the next several years as new toll roads open, the Virginia Department of Transportation (VDOT) is proposing a monthly fee of about $1 per transponder to pay for administrative and operations costs.

VDOT has the utmost understanding that E-ZPass operations brings convenience and efficiency to toll operations.  E-ZPass allows for electronic toll collection at Virginia toll facilities and lessens the need for manual collection.  However, there is a cost to providing the service to the participating toll facilities, most of which are not operated by VDOT.  The Virginia E-ZPass program is being expanded to support several new toll facilities scheduled or expected to be opened over the next few years.  The cost associated with the enhanced distribution and specialized services for the new facilities and additional transponders requires a new business model.

The proposed monthly fee would cover costs for:

•       Buying nearly one-half million transponders
•       Implementing a retail program where transponders can be obtained at various stores in Northern Virginia and eventually Hampton Roads
•       Providing service at select DMV locations
•       Upgrading information technology to accommodate the expanded program
•       Account management and processing of toll transactions (managing billing of all transactions)
•       Customer service and the operations of three customer service centers

The fee would also help control costs and manage the selection and demand for E-ZPass transponders.  The fee would be regularly evaluated to ensure that the charge is generating just enough revenue to maintain and operate the program without generating excess revenues above expenses.

While I was a regular user of the Dulles Toll Road and the Dulles Greenway when I lived in Loudoun County some years back, I’m now an infrequent user of E-ZPass and would certainly quit using the program if this increase were passed. While $12 a year is negligible, I simply don’t get $12 worth of convenience since I seldom use the toll roads.
Regardless, this strikes me as short-sighted. While it no doubt costs money to maintain the system, it’s surely cheaper than staffing lanes with human beings, who presumably demand salaries, benefits, vacation time, and so forth.  That’s why banks don’t charge customers for the privilege of using their ATMs*, even though they’re convenient for customers to use and expensive for banks to install and operate. Indeed, banks are increasingly charging a fee for using human tellers.
If E-ZPass is indeed analogous to ATMs, VDOT should be encouraging more people to get E-ZPass transponders, not trying to skim money from its customers who use them. Indeed, the goal should be to reduce the number of manned lanes to one or two per road, with the vast number of customers paying electronically. This would also likely lower the administrative costs of operating E-ZPass lanes.
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*Customers of other banks, of course, are a different story.
FILED UNDER: Economics and Business, Science & Technology, ,
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Moosebreath says:

    James,

    Generally agree with this take. Note that while I agree with “the goal should be to reduce the number of manned lanes to one or two per road, with the vast number of customers paying electronically.”, Florida has taken it too far, totally eliminating manned lanes and providing that if you do not have a Sun Pass, the state will bill you (with a service fee added).

  2. Hey Norm says:

    This can’t be right.
    Bob McDonnell is Gov. of Virginia and Republicans do not raise taxes or fees…ever!!!
    Certainly not on job creators.
    They only care about requiring invasive trans-vaginal ultra-sounds for women undergoing perfectly legal procedures.
    You should check your sources.

  3. Mikey says:

    I’m now an infrequent user of E-ZPass and would certainly quit using the program if this increase were passed

    Do you think you might use it more when the HOT lanes open up?

    Personally, I don’t use the EZ-Pass very often either, but I’ll hang on to it as it’s a great convenience when I travel back to Detroit or up to New York. The dollar-a-month fee isn’t that big a deal to me.

    As far as your point about it being better for VDOT to encourage more EZ-Pass use rather than trying to make the program, and thereby reducing the number of human toll collectors, I agree. I drove the George Bush Turnpike in Dallas late last year and they don’t have any human collectors that I could see. If you don’t have a transponder they just photograph your license plate and send you a bill, as commenter Moosebreath says of Florida.

  4. @Mikey:

    If you don’t have a transponder they just photograph your license plate and send you a bill, as commenter Moosebreath says of Florida.

    The problem is if you’re in a rental car, they get the bill, and charge you $40 for the convenience of paying a $6 toll.

  5. I think MIkey actually hit on a significant point:

    Do you think you might use it more when the HOT lanes open up?

    No doubt VDOT is anticipating a large increase in demand for transponders when the Beltway HOT lanes open up in a couple years. Of course, that will also mean increased revenue but that revenue will have to be shared with the company maintaining the lanes so it isn’t all going to go to the state.

    One alternative I know many people have taken advantage of is to sign up for the E-Z Pass program through one of the states that does not charge an annual fee.

  6. Gromitt Gunn says:

    In Texas there are still some human collectors on various lanes, but the strongest incentive to get a transponder is price – a $0.75 stretch of road is $0.90 if they have to send you bill, plus a $1.00 processing fee. After 30 days the $1.00 becomes $2.00. After 60 days, the $2.00 becomes $5.00. After that, there’s collections and court costs that start to get tacked on.

    You also have the option of either buying the transponder outright and taking responsibility for recharging, or getting it without an upfront charge if you agree to maintain an autopay attached to a debit or credit card. The autopay triggers when you go below a certain amount (I think the default is a $20.00 debit/credit triggered when you go below $5.00).

    If they added on a $1.00/month fee here, I think it wouldn’t be seen as a big deal, since you’re still saving money versus being billed by mail. Frankly, I am more concerned with how congestion-level pricing is going to work.

  7. Gromitt Gunn says:

    I’m curious – does VA charge an upfront fee for issuing a transponder?

  8. Mikey says:

    @Stormy Dragon:

    The problem is if you’re in a rental car, they get the bill, and charge you $40 for the convenience of paying a $6 toll.

    Indeed they did. Fortunately it was a business trip, so my company paid it, but it would have been a major pisser if I’d had to pay it myself.

  9. Mikey says:

    @Doug Mataconis:

    I think MIkey actually hit on a significant point:

    Mark your calendars, it doesn’t happen that often. LOL

    One alternative I know many people have taken advantage of is to sign up for the E-Z Pass program through one of the states that does not charge an annual fee.

    I’ll bet you a dollar (a month) that it won’t be long before all the other EZ-Pass states charge a similar fee.

  10. J-Dub says:

    Maryland already charges a fee. Heaven forbid they maintain the EZ Pass sensors with the toll money.

    Is EZ Pass a private company? Why aren’t they maintaining their own equipment?

    How long before they time you between sensors and start sending speeding tickets?

  11. grumpy realist says:

    @Gromitt Gunn: Unless they try to do dynamic congestion level pricing (which would piss off everyone), it shouldn’t be any harder than the different timings of traffic signals at particular hours, which we’ve had since GodKnowsWhen. The major problem would be in making certain to have electronic sign boards showing what the price is for the cash-only lanes.

    (I used to work in ITS, so I know far more than anyone needs to know about all this stuff.)

  12. grumpy realist says:

    @Gromitt Gunn: Illinois charges quite a fat fee when issuing a transponder, so they don’t charge anything else yearly. We still have a price discrepancy between I-Pass fees and cash fees pour encouragez les autres.

  13. Gromitt Gunn says:

    @grumpy realist: The first time I had what would have been a $1.50 round trip w/ a TollTag turn into a $6.90 (and rising!) bill was the day I got the TX TollTag. Heh.

    In Austin, they want to turn the leftmost lane into a toll lane on the bulk of Rt. 1, and have the price change depending on time of day. Since there’s a freight rail line that separates Northbound and Southbound through the most congested portion and existing housing stock lining the length of much of that stretch, as well, I’m kind of baffled as to how it all will work.

  14. Gromitt Gunn says:

    @J-Dub:

    How long before they time you between sensors and start sending speeding tickets?

    They do something like that in the UK. I was quite taken aback.

  15. Hey Norm says:

    I find it hard to believe Mataconis uses an EZ-Pass when we all know that’s just Big Brother watching where you drive and how fast.
    Next thing he’s going to tell us he uses those little cards at the super market to get a $00.45 discount and let Big Brother know exactly what he is eating and how much.

  16. @Mikey:

    The same thing happened to me when I had to go to Dallas on a business trip about a year ago. The exits from the rental car area at the airport dump you right onto the toll road (there may be a way out avoiding the toll road if you know to look for it, but not being from the area I had no way of knowing I should be looking because I was unaware of the system), so it’s pretty much an easy way to scam an extra 40 dollars from anyone flying into DFW for the first time.

    Again, my company paid for it, but it still kinda pissed me off.

  17. @Hey Norm:

    At most supermarkets you just have to ask to use the “store card” and you can still get the savings without having to have one of the cards.

  18. Moosebreath says:

    Norm,

    “Next thing he’s going to tell us he uses those little cards at the super market to get a $00.45 discount and let Big Brother know exactly what he is eating and how much. ”

    Of course not. The supermarket card is private industry, and of course private industry can do no wrong. 😉

  19. Hey Norm says:

    @ Stormy…
    I know…but don’t tell Doug.

  20. Mikey says:

    @Stormy Dragon: You can avoid the toll road by heading north through the ENTIRE FREAKING AIRPORT, making sure you don’t end up on the piece of toll road that actually runs through it. You spit out at the north end and I-635 is right there. Not a bad way to go if you’re headed somewhere on the north side of Dallas.

    I usually take the toll road because it’s a bit quicker to get where I’m going–but this most recent visit was the first with the new system, so the 40 bucks was a bit of a surprise.

  21. J-Dub says:

    I hate all of the schemes to extract money from drivers. If I had the means I would pay some local hoodlums to smash every red light or speeding camera in sight. They have been ruled unconstitutional in some areas.

  22. @Mikey:

    You can avoid the toll road by heading north through the ENTIRE FREAKING AIRPORT, making sure you don’t end up on the piece of toll road that actually runs through it.

    I suspected there was such an alternate route. As I said, not being forwarned at the time, I just followed the exit signs from the car rental place which dumps you right onto the toll road. And again, it’s not the toll road itself that bothered me. It was the rental company taking undue advantage of it without properly warning me.

  23. Tim Bashara says:

    Charging a monthly fee for EZ Pass is complete BS. This is just another example of taking advantage of those that save the VDOT and the toll road operators money by allowing them to eliminate manual collection. Common sense tells you that those that save money by avoiding manual collection should pay for the costs of administration. How stupid to now penalize those with EZ Passes for increasing the efficiency of the toll road operation while saving time, money and energy through reduced queuing at toll collection facilities. So now, to make sure that for profit toll roads with no cash option have to pay a fee to protect the profits of the private operators, others with no intention of using those facilities will subsidize the operation. And for those that only occasionally use the toll roads, they are incentivized to turn in the EZ Pass to save money which will further increasing wait times at the toll booths. This is a horrible idea and I hope the travelling public will revolt.

  24. Trumwill says:

    I had an EZPass for years, but canceled it for this very reason. The thing is that the EZPass was sold to the voters as a more efficient way of collecting tolls. It saved the system money. Did they really make money by (a) having people like me use the manned lanes that cost more to maintain and (b) avoiding toll roads more due to the fact that toll roads stopped saving as much time?

    I’m sure they have bean-counters that say that they did. So I guess it just seemed counterproductive.

  25. Dave Wang says:

    I thought E-ZPass was supposed to save money over the manual collection of tolls. Who is keeping the savings? Shouldn’t the savings go for expanding the system to save even more money? Why should E-ZPass customers pay more than the drivers who pay by cash?

  26. Rich Meehan says:

    Please consider signing this petition to let VDOT know you oppose this fee and if it’s implemented you plan to get the no cost I-PASS.

    http://www.change.org/petitions/no-virginia-e-zpass-fee#