Road pricing and pay-per-use insurance

Updated: Jan 17, 2017

As a means of reducing congestion, several cities and countries have already set up or are envisaging the implementation of a charging system for road users.

Road pricing

Toll gates are an inadequate means of collecting charges along multiple and small portions of a road. Tolling infrastructures, even automatic ones, cannot be implemented and maintained at any street corner. A means of electronic fee collection is the solution, and knowing where the driver is, and when, considerably simplifies the process.

Satellite navigation services have been identified as a promising solution for such road pricing mechanisms. GPS, as a free positioning and timing service, provides 24/7 coverage all over the world with for a very low equipment cost. Vehicles can be charged by how far they travelled in specific area compared to a flat entry fee. However, these kinds of applications require accuracy to within a few meters and need a complete trust in a system, features that GPS alone cannot offer.

Pay-per-use insurance

Car insurance companies are launching new services, trying to attract and keep new customers, preferably those that pose the least risk, that is, profitable policyholders.

Pay-per-use insurance is likely to be a major market for a positioning and timing service that is accurate and reliable. A pricing policy that better reflects the accident risk level would rely on where (e.g. highway, road, street, roundabout, crossing) and when (e.g. day, night, congestion hours) each vehicle is being driven. Speed is another crucial piece of information that could be provided accurately by satellite navigation, and acceleration could also be derived from it.

Such a pricing mechanism provides an economic incentive to the policyholders to reduce their mileage and drive in safer conditions.

Again, exactness and confidence in the information used is at stake and EGNOS can bring a lot to contribute to the development of this market.

Other commercial applications

A large number of other road applications share the same positioning and timing requirements, i.e. accuracy and reliability. The following applications are a few examples of applications already identified while new applications are emerging:

  • Driving assistance (e.g. environmental protection, increased safety)
  • Emergency call
  • Anti-theft systems
  • On-street parking
  • Speed enforcement
  • Tracking hazardous goods
  • Access to restricted areas
  • Livestock transport management
  • Traffic information collection

Considering the number of cars in Europe, the road sector is likely to become one of the major markets for EGNOS applications.

GNSS market segment: