In February 2020, before this whole covid crisis started, I participated in a congress in London, MOVE2020. There I listened to a talk by Susanna Zammataro, General Director of the International Road Federation, who shared with the audience potential opportunities on the importance and need to connect users, vehicles and infrastructure. The conclusion of this talk was: Building the infrastructure right is no longer good enough; In this impeding connected era, the real question is: Are we building the right infrastructure? This reflection left me thinking a lot about why roads are not yet connected to us as other services and products are today.
As customers, we often see how technology is advancing and how daily services become digitized, making our daily life faster, simpler, and easier. Once we get used to these new services it often becomes impossible for us to think about how our life would be without them. For example, traveling to a new place without using Waze or Google Maps seems almost impossible today, where before paper maps were used and we had to rely on the driver’s instinct to be attentive to traffic signs and take the right exit. Today the thought of traveling with a paper map is comical, and many times you don’t know what to do when you lose your cell phone signal in the middle of a trip.
Although everything is going digital, there is still one big segment that needs to make that leap and connect. We are talking about one of the oldest infrastructure segments used by practically all of us: roads and highways. But why are roads not yet connected, what’s missing? Even privately owned toll roads are seldomly able to share data seamlessly.Why is it taking so much time? To answer that, let me explain a little bit about how roads work first.
What is a private toll road and how does it work?
Toll roads often work as a concession. A concession is basically handing over public goods or services to a private company for a determined period of time to operate. During the time that the concession has rights over that good (in the case of highways generally between 25 to 40 years), and is able to generate revenue from this asset (e.g. via charging a toll). In return for this right, the private organisation must maintain the asset and drive improvements. For example, many highway concessions are obliged by law to invest in signaling, road expansions and other factors. Then, after the stipulated period, the property must return to the state with various improvements at zero cost to the government.