PA Turnpike COO tapped to lead multistate E-ZPass Group

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Shuey recently was elected to a two-year term as chairman of the executive management committee for the E-ZPass Group. The group comprises toll agencies in 16 states and operates the E-ZPass electronic toll-collection system, the largest toll network in the world, which is used on toll roads from the East Coast into the Midwest. The group was founded in 1993 with seven member agencies in three states; the turnpike commission joined in 2001.

With nearly 35 million customer transponders (or “tags”) in vehicles across the nation, the E-ZPass Group collects more than $11 billion in annual toll revenues among member agencies, Shuey said. The Pennsylvania Turnpike Commission manages 2 million E-ZPass accounts, with nearly 3 million transponders in circulation.

While E-Z Pass continues to add customers and new members, there could be some bumps in the road ahead, Shuey explained in a recent interview with the Business Journal.

Perhaps the biggest challenge is that the group’s members don’t all use the same toll-collection technology, which means some tolls get missed when motorists are traveling in different states. While a federal mandate called on system operators to standardize technology, the requirement isn’t funded and has yet to be met.

Lack of standardized equipment exacerbates another costly problem: tracking down drivers who intentionally don’t pay their tolls, including those from other states. A new Pennsylvania law that took effect this year gave turnpike officials added enforcement powers to pursue habitual toll scofflaws, who were estimated in August to owe the commission $17.1 million. But that means being able to find them.

In addition the Pennsylvania Turnpike and other toll roads are moving toward cashless electronic tolling, which will require the development of yet another layer of technology that will need to be integrated into their networks as toll booths and collectors are phased out, likely in the early 2020s in Pennsylvania.

Shuey has been turnpike COO since January 2011, following several years as the commission’s government affairs director. Shuey worked previously as executive director of the state Senate Transportation Committee from 2001 to 2009. A Bloomsburg University graduate, Shuey, 46, lives in Mechanicsburg.

The following interview has been edited for length and clarity.

Q: Tell me about the E-ZPass Group. What is its main role?

A: It’s a consortium of states and agencies that set the tone, set the business rules, look at equipment for the E-ZPass System nationally. We seek to build on the partnership between the agencies to make sure the money flows back and forth correctly.

Secondarily, the group sets a strategic vision for E-ZPass. It’s been hugely successful as a worldwide model for an interoperable toll-payment method, but that work is not done, and there is still a lot of interest in becoming a member of the E-ZPass group.

Not every U.S. toll network participates?

No. Florida and Texas have the two biggest groups using non-E-ZPass toll road systems, and the Rockies form a kind of divide — toll roads in the western part of the country are less through-traffic and more commuter traffic, and you see smaller toll segments.

With E-ZPass, we just picked up North Carolina as a full member in August. The system now extends from Maine to North Carolina, and as far west as Illinois. There’s a bridge you can now cross from Ohio into Kentucky with E-ZPass, and also the Peace Bridge, which crosses into Canada from Buffalo, N.Y.

There are 16 states in the group, but probably over 30 agencies now — in Pennsylvania alone, you’ve got the turnpike, plus the Delaware River Port Authority and the Delaware River Joint Toll Bridge Commission.

We’re having discussions with a lot of other agencies, too. Florida is a very big system — they have, I think, seven different agencies that collect tolls, using a tag called SunPass, but the technology is different.

You have talked about lack of “interoperability.” What does that mean?

When E-Z Pass started growing, it was a small part of every agency. And while everyone assumed it might grow, nobody knew how big it would grow, and so these systems have evolved independently. They don’t read the same information, they don’t capture the same information, and the equipment that picks up that signal isn’t the same.

What can be done about that?

A federal transportation law passed about four years ago officially mandated interoperability. There’s no federal money to buy the equipment, and the mandate doesn’t really give us a lot of direction. It just basically says all states should be interoperable, and I think it was by October of this year, that was supposed to have occurred.

What it means is, some agencies are going to have to buy new equipment, but it has also become clear that there may be different ways to solve this. To have California be interoperable with Pennsylvania, for example, isn’t hugely valuable — there aren’t a lot of cars or trucks that cross the country and drive into Pennsylvania, back and forth.

We’ve been part of discussions on a tag that is, for lack of a better explanation, four or five tags duct-taped together to form a “super tag” that could be used in a variety of jurisdictions with an account set up in each of those jurisdictions. That might be useful, especially from the freight standpoint. We have truck companies and truckers who operate from California to Maine, and they might have three different tags in their vehicles.

I know Pennsylvania is looking at moving toward cashless tolling. Would there still be a need for E-ZPass if all tolls are electronic?

Yes. As long as we have E-ZPass, we have a very effective way of capturing tolls and moving payments back and forth between agencies. E-ZPass would not necessarily be the only way of continuing to do that, however.

We want options for customers who are currently paying cash, and that may not necessarily mean E-ZPass. We’re working now on a smartphone app that will be able to be used to pay tolls — for people visiting from out of state, for example, who can pay their tolls without having to set up an E-ZPass account and buy a transponder. They can pay their toll, be done with us and move on with their day.

We have put out a request for proposals to find someone who could provide that technology, provide a mechanism for payment, provide a guarantee of toll revenue to us and take on the customer management.

What we don’t know is how fast that will take off. Will that concept become bigger than any of the systems we have in place now? And how will we be sure we’re getting the revenue?

Right now, we own the system. We buy the tags, we buy the reader equipment. We test it. We manage it. We know its capabilities and its weaknesses, and we get paid. And that’s the most important thing for any agency that has bondholders and legislators to answer to. So that’s what we’re still searching for in the next generation of technology.

Money is only one part of the equation, though. Safety comes into play with E-ZPass and cashless tolling, correct?

The E-ZPass system makes a lot of our traffic flow much, much better than it would otherwise. Imagine, in rush hour, if everyone still had to stop. We would be talking massive safety problems, massive gridlock. E-ZPass really was a necessity to continuing to be able to operate safe toll roads.

It’s an exciting time in the toll industry because of all these things that are changing. It’s also scary, having to discuss how we make all these things come together while still running the road effectively and, most importantly, safely.

Are you optimistic about the ability to move the E-ZPass Group forward together?

Every agency has its own perspective and priorities, and that’s one of the big challenges of managing the group. The reality is, you have 30 opinions that have to come to an agreement. And yet E-ZPass is continuing to grow. In our state, where it’s pretty well developed and has been around a long time, we’re growing 2.5 percent each year. So it’s a success.