Managing traffic, road safety, and smart infrastructure
With an ever-increasing number of drivers on our nation’s highways and bridges, managing the flow of traffic and reducing congestion is a top concern for many cities. This congestion often peaks on roadways and tunnels that require tolls for entry. The resulting bottlenecks cause vehicles to slow to a crawl; the stuff every driver dreads.
Over the past several decades, transportation authorities have shifted their focus to developing smarter transportation and infrastructure solutions. By using systems like electronic toll collection (ETC or eTolling), governments realize they can improve urban mobility and create modern, sustainable transportation networks.1
Electronic toll collection basics
Electronic toll collection allows passage charges for vehicles as they are being driven, without the driver needing to stop or complete a manual transaction. The system simply debits the account of the registered owner or identifies the assigned license plate for later billing via mail.2 This greatly improves the speed, safety, and efficiency of traffic flow on limited-access roads and bridges, saving drivers’ time.
In addition, ETC also cuts back on vehicle emissions (as a result of reduced waiting times at toll booths 3) and accidents. This is an important benefit for governments and public organizations in major metropolitan areas that are looking for ways to reduce air pollution and improve safety. ETC lanes also have the added bonus of being less expensive to operate than traditional toll booths, with some data showing savings of over $40,000 per lane in equipment costs alone.4
In part, what you pay at the gas pump contributes to the funding for infrastructure projects like ETC. The two main sources of funding for highways in America are state and federal fuel taxes.5 With the shift toward electric vehicles (EVs), there has been a gradual decline in fuel tax revenue. To combat this, some governments and tolling agencies are turning to road usage charging (RUC), also known as pay-per-mile and mileage-based user fees (MBUF). Instead of taxing when people pay for gas, RUC charges based on the number of miles traveled on roads. This creates a more equitable payment system where everyone contributes, regardless of fuel efficiency or EV ownership.
Implementations and modernizations of electronic toll collection systems
Many states have a version of ETC in the form of a “fast pass,” like the E-ZPass (usable in the mid-Atlantic and Northeast regions of the US), Florida’s SunPass, or North Carolina’s NC Quick Pass. As drivers move through designated lanes of the toll plaza, their pass device is scanned, and the toll is paid electronically. These transponders are linked to the driver's pre-paid account, and the toll is automatically debited. Some states charge their tolls a bit differently. Rather than a per-vehicle charge, the state of Georgia’s Peach Pass introduces a tiered payment structure. The driver registers the number of passengers in the car, and this helps to incentivize carpooling and the reduction of emissions.6
Many state and local transportation agencies are evaluating the replacement of highway toll plazas with open-road (or overhead) gantries mounted with high-resolution cameras for license plate reading and high-speed sensors for transponder detection. Widespread conversion to electronic open-road tolling (EORT) could bring a host of benefits, including better traffic flows, a drop in crash rates, improved asset management, low maintenance costs, emission reduction, and improved energy efficiency.7
Building on EORT and the electronic toll collection systems technology is multi-lane free-flow (MLFF) tolling systems. MLFF systems allow vehicles to pass through tolling points at highway speeds without slowing down or stopping.8 This makes a huge impact on bottlenecks and road safety around toll booths, especially on limited-access highways. As governments continue the push to modernize toll collection infrastructure, MLFF and EORT present a viable solution.
RFID in electronic toll collection
For electronic toll collection to work properly, there must be interoperability with other systems; at the heart of ETC lies radio frequency identification (RFID) technology. Commercially available since the 1970s, RFID uses radio waves to identify and track people or objects via a transponder that scans the data stored on a wireless device or “tag” without making contact.9 In the case of ETC, an RFID transponder reads the account data on each vehicle’s tag. This data is associated with specific toll passes that allow drivers to set a dollar threshold for funds to be added, or to pay weekly, monthly, or annually for toll road usage.10
RFID compliance and compatibility is essential for successful ETC implementations. Having RFID systems that don’t connect limits the success and scalability of ETC. For instance, while all the toll facilities in Texas are interoperable (one tag can be used on all toll facilities), there is a lack of compatibility with other states, and with toll facilities at border crossings.11 RFID also brings up questions of data security and privacy regulations. These concerns are valid, given that no system is impervious to attack, especially as we’ve seen in recent years with cyberattacks on critical infrastructure.
Electronic toll collection market trends and challenges
As cities and suburbs continue to grapple with population booms and the necessary infrastructure to support them, electronic toll collection is expected to increase, especially over the next 7 years. The U.S. ETC market size was valued at $10.20 billion in 2023, and is projected to reach $17.40 billion by 2031, with a compound annual growth rate (CAGR) of 6.9% during the forecast period.12 To manage this growth at the federal, state, and local government levels, transportation authorities are evaluating their infrastructures to identify areas for modernization and improve road safety.
A significant portion of market share for ETC sits in the U.S. and Canada, with both countries increasing their focus on smart transportation infrastructure. The expansion of ETC systems is also being driven by the increasing awareness of environmental sustainability. By reducing stop-and-go traffic, electronic toll collection systems help decrease fuel consumption and lower greenhouse gas emissions, supporting global efforts to mitigate climate change.13
Even with the anticipated growth in the electronic tolls collection market, there are several obstacles to implementation that must be addressed. Initial costs are steep when building and operating toll booths equipped with ETC technology, and when converting to open-road gantries for EORT. This can present a financial barrier to smaller public agencies on a budget. There are also valid concerns around privacy and security regarding the collection and storage of personal data by ETC systems, which might make some drivers hesitant to engage with the technology.14
Electronic toll collection in the future
With the widespread availability and benefits of ETC technology, this presents an opportunity for governments to attack roadway congestion and air pollution in one fell swoop. Cities and suburbs will gain the advantage of sustainable infrastructure, and drivers will be spared the aggravation of bumper-to-bumper traffic around toll booths. Even with high initial costs and privacy concerns, electronic toll collection is one example of modernization in the transportation industry that is here to stay.
CAI has been providing essential services and consulting in the tolls and transportation space for decades. We’ve helped state and local governments to build, maintain, and modernize their digital infrastructure. From disparate system alignment to ensuring network and data security in the face of increasing threats, CAI has made great strides working with agencies and their tolling operations.
To learn more about our work in transportation and tolling, fill out the form below.
Endnotes
- Research and Markets. “Electronic Toll Collection Market Research 2024-2032: Rising Adoption of Multi-Lane Free-Flow (MLFF) Tolling Systems Revolutionizing the Industry.” GlobeNewswire by notified. January 10, 2025. https://www.globenewswire.com/news-release/2025/01/10/3007479/28124/en/Electronic-Toll-Collection-Market-Research-2024-2032-Rising-Adoption-of-Multi-Lane-Free-Flow-MLFF-Tolling-Systems-Revolutionizing-the-Industry.html. ↩
- Transportation Policy Research. “Electronic Toll Collection Systems.” Texas A&M Transportation Institute. https://policy.tti.tamu.edu/strategy/electronic-toll-collection-systems/. ↩
- Data Bridge Market Research. “U.S. Electronic Toll Collection Market – Industry Trends and Forecast to 2031.” May 2024. https://www.databridgemarketresearch.com/reports/us-electronic-toll-collection-market. ↩
- Transportation Policy Research. “Electronic Toll Collection Systems.” Texas A&M Transportation Institute. ↩
- Azuga, a Bridgestone Company. “Road Usage Charging.” May 30, 2025. https://www.azuga.com/fleet-tracking-glossary/road-usage-charging. ↩
- Transportation Policy Research. “Electronic Toll Collection Systems.” Texas A&M Transportation Institute. ↩
- Eilbert, Andrew; Mittelman, Anjuliee; Chouinard, Anne-Marie. “Estimating Esmission Benefits from Electronic Open Road Tolling Conversion Projects.” Repository and Open Science Access Portal. June 30, 2022. https://rosap.ntl.bts.gov/view/dot/64625. ↩
- Research and Markets. “Electronic Toll Collection Market Research…” GlobeNewswire. ↩
- Homeland Security. “Radio Frequency Identification (RFID): What is it?” August 1, 2024. https://www.dhs.gov/archive/radio-frequency-identification-rfid-what-it. ↩
- atlasRFIDstore. “Tolling with RFID.” https://www.atlasrfidstore.com/rfid-resources/rfid-applications/rfid-toll-systems/. ↩
- Transportation Policy Research. “Electronic Toll Collection Systems.” Texas A&M Transportation Institute. ↩
- Data Bridge Market Research. “U.S. Electronic Toll Collection Market…” ↩
- Research and Markets. “Electronic Toll Collection Market Research…” GlobeNewswire. ↩
- Data Bridge Market Research. “U.S. Electronic Toll Collection Market…” ↩
