Privacy Could Make or Break Milage-Based User Fees
Privacy Could Make or Break Milage-Based User Fees
Publish Date: 2026-05-25 18:14:00
Source Domain: www.theadvocates.org
The architecture of a GPS-enabled mileage-based user fee system can be designed to protect privacy.
Proposed mileage-based user fees (MBUF) systems would charge roadway users per mile driven. This model offers advantages over traditional fuel excise taxes, in which road users are taxed per gallon of fuel consumed. With rising vehicle fuel economy, as well as hybrid-electric and battery-electric vehicles, MBUFs offer a propulsion-neutral alternative to ensure road users pay their fair share for their road use. User privacy in the collection of MBUFs has emerged as a major public concern. Fortunately, privacy can be protected when MBUF systems are designed properly.
The simplest way to address privacy concerns is to offer MBUF measurement and collection methods that do not rely on location information. This approach has been adopted in Hawaii, which assesses MBUFs through odometer readings as part of the state’s existing annual vehicle safety inspection process. Payment for the annual MBUF assessment is then due at the time of vehicle registration renewal. MBUF programs in Oregon and Utah offer customers the option to submit mileage assessments by capturing photos of their odometers.
While odometer readings ensure customer privacy because no location information is involved, there are drawbacks. Reporting requires more effort on the part of customers. In the case of annual or quarterly reporting, billed amounts will be higher and may be burdensome for lower-income customers. Auditing and billing disputes are necessarily more challenging. Miles driven out of state or on private property are also not exempt. Oregon does allow odometer-reading MBUF enrollees the option to submit a form annually requesting reimbursement for these miles driven, but this is hardly a seamless or precise system. And simple odometer readings would preclude more advanced pricing policies in the future that could vary charges by roadway and traffic…
