Toll Insight spoke with Donovan Guin, U.S. Tolling Practice Lead for IBM.
International Business Machines (IBM) Corporation is an American multinational technology and consulting company headquartered in Armonk, New York, with more than 350,000 employees serving clients in 170 countries. Throughout the past 80 years, IBM has worked to innovate tolling technology.
1. IBM has a storied history in the industry of tolling. How has the company pushed the state-of-the-art in this space?
IBM has been in the space for a long time. In the 1930s, IBM invented the first technology to count the number of cars passing on a road. 80 years ago, in 1940, the first automotive toll road opened – the Pennsylvania Turnpike. The toll collection system was developed by IBM, and this included everything from equipment at the toll booths to accurately price and collect money to technology for recording revenue. Our equipment became the standard for tolling around the world, and we contributed more innovations over time, such as the invention of the mag stripe. These were added to toll tickets to automate the pricing calculation for each vehicle passing through the toll booth.
In modern times, we launched the congestion charging program for Stockholm, and we delivered a similar program for London. We did related work in Singapore, helping with traffic management, and we provided a way for people to use any transit program fare ticket they had purchased, across the five different transit authorities operating in the city. This made it easier for people to shift their traveling behavior from driving in their cars to taking public transportation – a key element of successful congestion charging programs.
Today, the systems we have delivered continue to operate around the world, processing more than 1.5 billion toll transactions per year. Our systems make it easier for millions of people to get where they need to go, while helping the economies of our clients to keep moving forward.
2. Cordon / congestion pricing is becoming increasingly of interest to many cities around the world. Tell us about the driving forces around this trend and which urban centers have taken the lead.
Cities are the center of our economies – the jobs they provide create most of the world’s wealth. This makes them a magnet for people, and over the last two decades, cities, particularly in the United States, have seen unprecedented growth in population. And with all those people has come – you guessed it – more traffic than ever before. People do not usually live within walking distance to work, and cities with big transit systems have found that the subway and commuter lines they set up decades, and in some cases, more than a century ago, have not met the needs of an ever-growing urban landscape. New York, for example, has added a new subway line, but this was expensive, took a long time, and in the end, only helps one corridor of commuters. As our urban landscape grows ever outward, taking over what were formally suburbs and country towns, the problem will only grow worse.
With few options, an increasing portion of the population has been forced to get in their cars. The presence of more cars has led to more time on the road for each of us, with more idling; the road networks can only handle so much and creating more capacity just induces more demand. Moreover, what is frustrating for commuters, is also bad for economies. If economies depend on the free flow of people, goods and services, what happens when our communities become gridlocked?
Add to that the issue of pollution, and it is easy to see why more and more cities around the world are taking a serious look at congestion charging programs. Cities produce most of the world’s carbon emissions, and most of those are produced by vehicles on roads. All that exhaust puts carbon in the environment, particulates in the air we breathe, and carbon in the oceans that abut so many of the world’s leading cities. If you want to tackle climate change, around the world, that change starts at home. More to the point, it starts on the roads; fighting traffic is critical if want to move forward into a cleaner, more sustainable future.
3. IBM has established a strong name presence in this cordon pricing niche. Tell us about the company’s experience, successes and lessons learned in delivering the encompassing solutions.
Our main experience goes back to setting up and running the congestion management program for Stockholm. This was a greenfield implementation, inspired by the Singapore congestion charging program but updated and modernized. IBM led the overall project, implementing roadside equipment (tags, tag readers, and cameras with Optical Character Recognition or OCR), back office systems, and an operations program. Once live, the system proved highly effective, reducing traffic by 20%. Over time, the reductions in traffic were sustained, while revenue remained steady. We were also able to improve the accuracy of the OCR technology to the point where we were able to decommission the tag program and use images for all toll transactions. IBM continued to run all aspects of this program for about 10 years, but the systems we delivered are still in operation today.
Around the same time, we also took over the initial congestion charging program that London had set up. We updated many parts of that program and ran it for about a decade. Those systems are also still in operation today.
Finally, a second city in Sweden, Göthenberg, decided to set up a congestion charging program. Rather than set up a completely new system, they approached IBM about extending the Stockholm system. After some updates, we relaunched the system to be able to support multiple cities, so today, both Stockhom and Göthenberg use the same back office system for congestion charging.
4. How would you compare and contrast cordon pricing projects to more traditional tolling? Which types of innovations and emerging technologies do you see as most relevant moving forward in these overlapping areas?
Congestion charging takes many forms – even the name varies depending on your point of view. In New York, they are referring to it as “Congestion Pricing”, a name which leaves the concept of charging out of the picture. This may be because New York is planning to calculate charges with the host system that supports the roadside equipment; these prices will then be passed to a central back office where all tolling charges will be processed. But it may also suggest a subtle shift to help improve public perception; “pricing” may sound more appealing than “charging.”
To answer your question though, “cordon” pricing simply refers to an area set up around a location for tolling purposes. Stockholm has one, but London has several cordons abutting each other, which we refer to as zones. Once you cross the boundary, and enter the cordon, you will be charged a fee. If you go out, and come back in, you will be charged again. This is closer to the tolling on bridges and tunnels, where you pay a fee to enter, but different than highway tolling, where you typically have a price calculated based on where you entered and exited. Even the time-of-day pricing that happens on some highways, to fight congestion, is a different scheme than a cordon around an urban zone. These city locations have all sorts of technical challenges related to the environment; in highways, you do not get pedestrians crossing the road, cars cutting across intersections, or delivery vans double parked, etc. Moreover, residents and businesses resist using gantries, forcing you to look at side-fire cameras, which are not looking at license plates head on.
As more cities look at these programs, we have more options becoming available. These include advances in artificial intelligence, which can help with the greater variety of images you will get in an urban environment. It also includes GPS-based tolling, where the position of a vehicle can be shared with the central system as it passes through the city. This can come from cell phones, where a mobile app can be used to share location. Or it can come from connected vehicles, when and if auto manufacturers are ready to support such programs. Finally, blockchain looks like a promising way to open the ability for payments to be charged and collected across a variety of players, from mobile service providers to car manufacturers, while keeping the money straight. We are working a lot with these technologies, with tolling in mind. While these options are just emerging, they show promise for future programs.
5. Tell us about your own career trajectory and how it is facilitating your current role at IBM.
I spent almost two decades leading digital and e-commerce programs, for clients across a variety of industries. For example, I led teams that built the e-commerce platforms for companies like Sam’s Club and Johnson and Johnson. Several of these programs had a global component, with one client using the platform now in more than 80 countries. When I joined IBM, nearly 6 years ago, I set up and led our practice for SAP Hybris, one of the leading e-commerce and customer experience platforms in the market. One of the products in that portfolio was a high-speed, high-scale billing and revenue management platform. It turns out we have used elements of that in our tolling back office solutions going back to Stockholm. So, when it became clear that the tolling market needed something new, based on commercially off-the-shelf software, it was perfect timing. Add to that, the toll authorities need to shift to a better, more digital customer experience, and it seemed like a natural fit. Over the past few years, IBM has asked me to make this my full-time role, leading our tolling practice in the U.S., as we get more interest from agencies. I also play a role as part of our global leadership team for tolling, facilitating the exchange of ideas and assets from one market to another. This helps IBM, and our clients, stay on the cutting edge. Personally, it is rewarding for me to see how we are helping to transform the industry and improve the way our clients benefit the communities they serve.