Smart Traffic Ecosystem development enables usage based insurance and road charging

The number of cars and other vehicles on the streets is growing rapidly. Traffic is causing 20 % of all CO2 emissions. The pollution and congestion problems continue to increase. Electric cars are being produced too slowly and they use energy as well. Several pieces of research conclude that in order to limit the continuing growth of traffic along with the growing emissions, mechanisms to charge smartly on kilometers and other driving factors, must be brought into use.  The other driving factors are time, location and driver behaviour.

In the Netherlands, a parliamentary decision was taken to implement a pay per km system to cover all vehicles. However, the decision was postponed, as several mistakes were made in the preparation and finally the decision was cancelled. In order to gain acceptance from people for a national road charging system the ecosystem with usable data services should be implemented first. This is, however, a kind of a chicken and an egg challenge.

In Finland the approach is different from the one in the Netherlands. Public and private organisations in Finland have been preparing an ecosystem to enable satellite based charging for driving. A group of reputable companies including Pohjola Insurance, Aplicom, Nokia and Destia Traffic started a co-operation group (PANDA)in 2007 with the aim to develop an innovative multi-service structure for driving data services.  To make the new open interface service innovation concrete even a new company, – Astarte, was started –this completed the PANDA name with the last A. The driving data service provider Astarte later changed its name to Helpten when expanding internationally.

PANDA group made joint development and stepwise pilots, first with Pohjola´s motor insurance customers, in developing a new smart traffic ecosystem. The overall goal for the new ecosystem development was to make traffic safer, less polluting, more convenient and economically efficient. The key for the service system development was that it created its own, and collected other providers`, usable services with easy to use interfaces for drivers and fleet organisations – and at the same time prepared the system to be able to provide reliable and privacy protected data for usage based charging purposes. The co-operation group is working closely with ministries, other government organisations, and also other co-operation groups.

PANDA multi-service concept follows the EU´s guidelines in ITS (Intelligent Traffic Systems) Action plan and applies directives for Electronic Tolling Systems (EETS). An innovative solution with a strict privacy policy when handling driver data has been developed, tested and analysed.

The Panda multi-service system provided in its second phase in 2010 various data services (like CO2 driving feedback, driver log book, traffic information and positioning). The ecosystem development has moved thereafter to its 3rd phase and new companies have joined the group. Two pilot phases have already been realised and the next generation set of services with an innovative driver interface and on-board unit is to be released in 2012 after intensive development.

With the approach selected by PANDA group it is possible to simultaneously introduce usable services to drivers and in a very cost efficient way to create data for usage based insurance (PAYD/PHYD) and road charging. The key question is not to make the devices as cheap as possible but to create user value simultaneously for several players from the same position related data. A usage based road charging can be developed in a publicly acceptable way with the new smart traffic ecosystem keeping users’ needs at the centre of focus.