What Applied Location’s Software Enables

DRAFT: October 2003.

Applied Location’s innovations provides a new class of geographic information system (GIS), called a location information system (LIS).  We use an LIS to gather, aggregate, and map tracklogs of vehicles.   Our core application is privacy-assured billing applications for vehicles − specifically, road-, parking- and pay-as-drive insurance-pricing.  Advanced applications include separate pricing for HOV lanes, generation of congestion maps for static planning, data feeds for real-time navigation, data feeds for real-time management of traffic signal system networks, and location-based subscription services.  Future-looking applications include realtime parking spot location, automated price negotiation between automobile and competing parking lots, and automated load-balancing among parking lots, and automated tracklog analysis to provide individual motorists advice to reduce their driving expense.

Parking pricing can be applied in stages starting with open-sky, mid-town, street and lot parking, including spillover management for retail courtesy parking, and shortly thereafter residential street permit management as well as indoor parking and gated parking in the urban core can be tackled. Finally, technology to defeat GPS’ line-of-sight/multipath limitation will allow monitoring of street parking in the urban core and in areas of heavy foliage to provide universal, meter-free, pay-by-the minute parking anywhere.

Road pricing can be applied in a graduated fashion over time and location to reduce peak traffic volumes and diminish pollution while avoiding undue harm[1] to businesses that are located in the urban core (or high-road-cost areas).  The pricing scheme can float as congestion shifts its location and time-of-day to avoid temporal and location “bunching” that may occur as motorists avoid the price-on/price-off shoulders of single-price schemes.  Pricing all roads can reduce the diversion of traffic from main (priced) thoroughfares and minor (unpriced) roadways.  In fact, it is possible to curtail heavy usage of residential streets by use of differential pricing rather than artificial cul-de-sacs and exaggerated use of turn restrictions.[2]

Pay-as-you-drive (PAYD) insurance pricing, typically proposed as a distance pricing, is far more equitable if it is based on location, time-of-day, and congestion conditions as well as distance traveled.  PAYD insurance can immediately address high insurance costs for low-mileage motorists.  As PAYD insurance becomes accepted and eventually the norm, external crash costs (risk) will become internalized to be borne directly by each motorist in an equitable fashion.

Universal pricing provides the ultimate control levers for traffic management, control and planning, while balancing inequities and providing a significant new source of revenue for municipalities.  An interesting result from the above-mentioned IPPR study is that revenue-positive road pricing is effective in reducing congestion and pollution, while revenue-neutral pricing has little or no effect.  See following table.

Impact of a congestion charge plus carbon tax in 2000 and 2010
(This table is specific to UK conditions.) 

Charge type	2000 Revenue neutral	2010 Revenue neutral	2010 Revenue raising
Change in total traffic (Billion vehicle kilometres per year)	+ 14.7	+ 36.3	- 36.6
% change in total traffic	+ 3.4%	+ 6.7%	- 6.7%
Change in bus patronage (Billion passenger kilometres per year)	+ 0.7	+ 1.6	+ 2.1
% change in bus patronage	+ 4.2%	+ 8.6%	+ 11.4%
Change in CO2 emissions (Million tonnes of carbon per year)	+ 0.7	+ 1.7	- 2.8
% change in carbon	+ 2.6%	+ 5.0%	- 8.2%
Total revenue increase (£ billion)	N/A	N/A	16.6 (in 2010 prices)
% change in total revenue	N/A	N/A	57.1%

One might even look at the hesitant funding flow from of Federal and Provincial coffers as a blessing in disguise − it may just force municipalities to act to source sorely needed funds for public transit and road maintenance, while reducing congestion and pollution and diminishing the need for new roads.

In the background of Applied Location’s work regarding road-, parking- and insurance pricing are a body of principles critical to the economic efficiency of a pricing system.  Originally developed specifically for road and parking-pricing by Nobel-laureate, William Vickrey, these are:

1. Pricing rates can be set to vary according to location and time of day in an arbitrarily timely, detailed, and continuous manner;
2. Pricing may be graduated throughout the period of use, as opposed to being fixed for a particular time and place, a particular starting point or a particular ending point;
3. Pricing rates may be changed without modification of physical signage, without modification of physical meters and without modification of in-vehicle devices;
4. Pricing rates may vary smoothly over location and time (no abrupt shoulders in rate curves);
5. Pricing can be calculated by the minute.
6. Additional, graduated, parking charges can be levied in lieu of parking tickets;
7. The management of and collection for parking usage should be relatively free of theft and vandalism;
8. To manage congestion most efficiently, charges should be influenced by the specific impact a particular trip has had on the congestion conditions at the time of the trip, rather than be based on a schedule fixed in advance;
9. Congestion Pricing can be calculated over arbitrarily small trip segments rather than from one observation point to another in order to allow the maximum flexibility to control congestion;
10. In order to assure fair pricing of rental or service vehicles such as taxis, trip charges can be calculated and made available in realtime.

Without respecting these principles, normal market forces are perverted to the detriment of the environment and the ability of a municipality to manage traffic in a fair, equitable and effective manner that encompasses external costs such as congestion and pollution. Applied Location is unique as the only innovator with a body of technology that embodies and enables all of these principles.

In addition, we set out four extensions that we believe are critical to deployment and social acceptance and hence system success.  These are:

11. Maximize privacy assurance.  We make eavesdropping, data-theft, and location disclosure of individual vehicle extremely difficult.  Only a concerted and complex effort by three independent parties, each acting illegally, can comprise privacy.  The only exception is police demand for criminal suspicion.
12. No user interface.  Once installed, there is no opportunity for interaction.  Smart cards or their equivalent are neither required nor desired.  Re-programming occurs wirelessly (satellite, RFID control point, or at designated device installation service points).  This ensures no opportunity for operator error or accidental manipulation.  It also dramatically reduces opportunity for fraud.[3]
13. No ground infrastructure beyond that in place for the ground control segment for positioning satellites.  This provides maximum flexibility and minimum maintenance costs.  Only digital maps and pricing policies are needed to enable this system in any particular area.  Policy and prices can be modified by modifying the contents of at least two databases. No physical device is touched, moved or added.
14. Parking-pricing for small lots with only a few or even only one parking spot can be economically viable.  This is ensure the ability to control spillover, which is both detrimental to business and to some extent defeats congestion control.

© Copyright 2004 Applied Location Corporation. Last update: 04.04.19; 12:32:16 AM.