IBTTA Annual Meeting Offers a Primer on Toll Leakage from the Lost Revenue Task Force

When a driver manages to go through a toll facility without a valid payment method for the toll, the toll operator snaps into action (typically by snapping a license plate photo) and begins the process of collecting the correct amount owed by a customer. They send a notice to the vehicle owner seeking payment for the appropriate charges and the driver pays.

At least, that’s how it’s supposed to go. The reality is often a bit different. 

As toll facilities overwhelmingly adopt cashless operations to enhance traffic flow, safety, and convenience for customers and reduce emissions, the number of transactions that rely on a license plate image to complete the toll payment has necessarily increased. These cashless all-electronic tolling (AET) operations have introduced new sources of revenue leakage that toll operators are now actively addressing. Unreadable license plate images may be caused by errors in the toll lane equipment and systems, but are most often triggered by customer behavior, intentionally or not. Some drivers are able to circumvent the system by blocking their license plate, preventing the camera from taking a good image of the license plate in order to prevent being identified (and, once identified, tolled). Even if a good license plate image is obtained, there are still unbillable transactions due to unavailable or undeliverable addresses. And then, even if you do manage to track the vehicle owner down, they just might not pay, requiring more expensive avenues of debt collection, enforcement provisions, appeals, and adjudication to pursue collection of the toll.

This all results in lost revenue, or toll leakage. It’s a problem for tolling operators for very obvious reasons.

“Sometimes plates are obstructed, missing, up in the windshield—those are customer behavior things that are difficult to control,” said Eric Hunn from Duncan Solutions during a meeting of IBTTA’s Lost Revenue Task Force, which held an open panel discussion during IBTTA’s 89th Annual Meeting & Exhibition in Anaheim, CA. “Sometimes we’ve heard camera angles don’t pick up certain plates,” which is another issue entirely.
Technological challenges, different design standards and changes in plate styles also present challenges to toll operators looking to minimize toll leakage. Hunn gave an example of an instance where the state of Colorado issued a new license plate style that focused on breast cancer awareness. Then a tolling system taking photos of these newly-designed plates was misidentifying where they were from. “The breast cancer awareness plate is somehow, through the color configuration, being picked up as a Nebraska plate,” he said, noting that the toll operator would send the picture of the plate ABC 123 over to their counterpart in Nebraska. “It’s going to the Nebraska DMV and it says ‘we don’t have a match for ABC 123,’” he added. “So that’s instant leakage.”

As with most things, vigilance and adaptability are key to minimizing these sorts of challenges that can rob toll operators of revenue. “All of these are ongoing lifecycle things. Every state is an island unto itself. Plates change and configurations change,” he said. “So when we get into best practices, we’re recommending that your operations team, your technical team should have an ongoing review process to try to always stay one step ahead of changes in the industry.”

IBTTA’s Lost Revenue Task Force will be working into 2022 to complete its exploration of improved revenue collection as new technologies and business practices reshape toll operations. The task force is collecting quantitative data through surveys of toll operators, as well as qualitative input through interviews with toll managers. IBTTA members can help the task force by responding to these inquiries. The outcomes of these efforts will be a compendium of best practices and case studies for members to draw upon, as well as business case analyses that will help toll organizations understand the costs and benefits of investments and process improvements to improve revenue collection performance. Learn more here.