Auckland-based Eroad, a maker of technology for tracking vehicles, saw its shares surge by one-third after the Government revealed a plan for universal road user charges to replace petrol tax.
The new system could be ready to go as early as 2027, although Transport Minister Chris Bishop has not set a date for full implementation.
On social media, there were fears about people’s every move being tracked by the Government, especially given that Bishop said the new system would also collect road tolls and congestion charges, allowing “a single easy payment”.
Motoring writer Clive Matthew-Wilson wondered about the feasibility of an electronic solution, given that the cheapest mileage monitoring hardware costs just under $300 and typically involves monthly charges, too.
But Eroad co-chief executive Mark Heine says most cars sold in the past eight to 10 years would not need a bolt-on box.
Eroad, which provides technology for commercial fleets, could build a smartphone app that could talk to a modern car’s electronic systems to get a mileage reading via the vehicle’s e-Sim (a variation on the Sim card that sits inside your phone).
For older vehicles, Eroad could make a “smart tag” that would be stuck to a driver’s windshield. It would cost about $40.
The $40 tag is still on the drawing board as Eroad and its peers wait for the Government to reveal the finer points of the scheme, but Heine says he’s got a good handle on the scheme after NZ Transport Agency Waka Kotahi (NZTA) put out a consultation document and request for proposals in November last year, to which Eroad responded.
Heine said the RFID (radio frequency ID) tags used for road tolls in Sydney provided a model.
GPS could be added for tracking. The Privacy Act of 2020 forbade his firm from passing on any location or tracking data to the Government, at least without a warrant.
Andrew Rossington, chief product officer for Eroad rival Teletrac Navman, said his firm also responded to the Ministry of Transport’s request for proposals.
“A decision on any plans for us to release a consumer-level e-RUC product will need to be determined once some firmer decisions are made on the requirements for such a solution. We are assessing options in conjunction with Gilbarco Veeder-Root.”
Teletrac Navman and Gilbarco Veeder-Root both include elements of firms founded then sold by rich-lister Sir Peter Maire (Navman and Invenco, respectively). Today, both are ultimately owned by US-based multinational Vontier.
Road user charges (RUCs) have long been in place for heavy vehicles. Since its creation in 2000, Eroad had collected more than $6 billion in RUCs for the Government, Heine said.
But RUCs for all vehicles are uncharted territory. Heine, whose firm’s main markets are New Zealand, Australia and North America, monitors global trends closely.
He said New Zealand was the first country to propose universal RUCs, although Hawaii, which will introduce RUCs of US$8 per 1000 miles ($13 per 1609km) for EVs in July, has said it will apply RUCs to all vehicles from 2033.
The tracking of where vehicles travel also raises privacy issues.
“Digital charges for road users will require collecting information about how far a vehicle has travelled,” the Office of the Privacy Commissioner said.
“Some of the sources for collecting this information digitally may include details of a vehicle’s location and movements too.
“This information can reveal a lot about a person’s life and habits, so it is important that it is approached in a way that upholds and protects New Zealanders’ privacy.
“We expect to see more work on privacy issues as these proposals take shape. Incorporating privacy considerations into the policy development process, such as minimising the amount of information collected and what it can be used for, is necessary to ensure New Zealanders will trust these systems with their information.”
The Privacy Commission will work with Ministry of Transport officials to ensure that these considerations are accounted for throughout the process.
“It’s important for privacy to be baked into a system designed for private use,” Eric Crampton, chief economist with the New Zealand Initiative, which supports a transition to RUCs, said.
“It’s different from a trucking operator, where tracking is part of an employment contract.”
The privacy issues were surmountable, Crampton said.
It was important that there was an open protocol system, including minimum standards of privacy, for which multiple private providers could build systems.
“Privacy could be one way that providers compete with one another,” Crampton said.
Some could meet the baseline privacy standards, while others might go “hardcore”.
On the flipside, poorly implemented or limited privacy safeguards could cause a widespread backlash and stymie reform.
Heine said there was potential for data from e-RUC systems to be used for better transport and road planning, but the information could be anonymised so it showed only broad trends and did not identify individual drivers.
The Fuel Excise Tax currently accounts for 70c of the cost of every litre of fuel pumped into a petrol car.
The fuel tax is also subject to GST, so switching to RUCs will remove 80.53 cents per litre from the current cost of petrol. Petrol will become cheaper.
We won’t know until next year, or perhaps 2027, how much petrol vehicles will be levied in RUCs for different weights of vehicles.
But the $76 per 1000km charge for light EVs, introduced last year, provides a point of comparison with today’s fuel tax – and is used in the calculator above, created by Herald data journalist Chris Knox.
EV owners buy blocks of 1000km, with a $12.44 admin fee if buying online or $13.71 if bought from an agent in-store (Bishop says an all-electronic universal system should reduce admin). You can buy anywhere from one to 99 blocks of 1000km for a single admin fee.
Most EV owners manually make an initial odometer reading, which is then checked against how many RUCs they’ve bought each time they get a warrant of fitness.
There are fines of up to $15,000 for trying to cheat the system by, for example, winding back your odometer (or today, more likely hacking it with a laptop).
Not displaying a current RUC licence on your windscreen can attract a $400 fine. NZTA said more than 5000 diesel vehicle owners received fines for this offence in 2023.
Bishop said the new all-electronic system would no longer require a windscreen sticker, with digital record-checking used instead.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.