The ETC System Stalls at the (Toll) Gate

Electronic toll systems are inching forward at a snail's pace in Japan

"I wonder what the system is for," wrote 21-year-old Yasue Takeda on the Yomiuri Shimbun's readers' forum. Takeda had just survived Golden Week traffic tie-ups on the Tohoku Expressway and was unimpressed. "As far as I could see, the ETC-only tollgates were not only rarely used -- they were even exacerbating the congestion at the regular gates."

Now a common sight on Japan's highway tollgates, the ETC system was introduced by the Ministry of Land, Infrastructure and Transport in March 2001. The system was supposed to ease traffic jams on the nation's major expressways, allowing vehicles equipped with a transponder to pass through the gates without having to stop to pay.

The system requires the driver to have an ETC-compatible credit card for insertion into a transponder slot. As the vehicle passes through the tollgates, the fare is recorded on both the expressway computer system and the IC card in the transponder via the technologies of wireless telecommunications.

Thirty percent of highway congestion occurs at tollgates, according to the Japan Public Expressway Corporation (JPEC), operators of expressways nationwide. Instead of expanding roads, accelerating the speed at which traffic passes through tollgates is a quicker solution. The JPEC estimates that ETC systems can double or even quadruple the number of cars passing through the gates at a given time.

Consumer response in Japan, however, has been slow. 76 percent of the drivers cited in the above survey remain wary of installation due to the price. Many drivers who only occasionally use expressways have found the system's initial price tag of JPY30,000 to JPY40,000 too expensive.

More than 70 percent said that the desired price would be under JPY5,000, though 57 percent say they will still consider the system in the future. And if the ETC systems are available at the ramps and parking lots of shopping centers, for example, the figure jumps to 68 percent. Many drivers are willing to pay the cost if the systems move beyond expressways.

Similar ETC systems have been employed for over 10 years in the West, and more than 30 countries now offer the service, according to the nonprofit study group, Toll Road.Org. Seven million transponders, called "E-Z Pass," are in full force throughout the US East Coast. 70 percent of New York vehicles have an E-Z Pass plastered to their windshield, dramatically reducing traffic jams during the urban rush hour. Users in New York can even rent the transponder for as low as $20.

In Italy, the Tele-pass system prevails, with a JPY200 monthly fee for the transponder. Ten years ago, the Italian models were similar to those now found in Japan, which are installed inside the vehicle with an IC card in a slot. But now Italian transponders are attached to the windshield like the US models. This system is also compatible in other countries of Southern Europe.

To tackle the lackluster sales and mounting criticism of the current ETC system in Japan, bureaucrats, toll road operators and electronics companies are not idling.

Three public expressway corporations have been offering a 20 percent discount service on Japan's expressways for the period covering November 30, 2001 to June 30, 2004, granted to drivers who registered their ETC cards between November 2001 and June 2002. Also, drivers who registered with prepaid ETC tolls have been entitled to discount services on the expressways since July 2002. The discount rates are 4.8 percent for JPY10,000 and 13.8 percent for JPY50,000.

Earlier this year, at the end of February, public expressway corporations stopped selling the high-priced prepaid expressway cards, available for JPY30,000 and JPY50,000 apiece. Transport minister Chikage Ogi said that denying drivers access to the highway card would help convert them to the ETC system. While the ministry permits drivers to continue using cards that were issued previously and is still selling lower-priced cards of JPY10,000, JPY5,000 and JPY3,000, Ogi is considering abolishing them altogether by the end of February 2004.

In June, the transport ministry announced that it would give discounts for the transponders to the first 450,000 vehicles that applied for the two-year monitoring of the ETC system use. They promised JPY8,000 discounts for the first 350,000 commercial vehicles, such as trucks, buses and taxis, and JPY5,000 discounts for the first 100,000 (later upped to 120,000) private vehicles. Applications rushed in before the government closed the offer within two weeks.

"The government campaigns and the discount services have gradually pushed sales of our transponders," says sales representative Koji Yoshikawa at Matsushita Electric Industrial Co.'s Automotive Systems division. The electronics companies are also releasing remarkably cheaper equipment. Matsushita marketed separate-antenna type CY-ET 500 (JPY20,800) in June, which now boasts top sales in the transponder market. "We are now continuing full-steam production to meet the number of orders," Fumio Kosuge told Nikkei Business Daily.

In April, Mitsubishi Electronics released the antenna-installed type EP-222 (JPY16,800), which can be attached to the car windshield in Japan. Mitsubishi followed this with one of the world's tiniest models, the EP-422 (JPY19,800), a separate-antenna type. Other companies are also releasing products priced at under JPY20,000, less than half the earlier price of the transponder models.

Those campaigns of public and private sectors paid off. ETC system usage on the expressways is now rapidly increasing. From May 30 to June 5, the ratio of vehicles with a transponder accounted for 6.8 percent (one per 15 cars) nationwide, 8.7 percent (one per 11 cars) on the Shuto Expressway, compared to 2 percent (one per 50 cars) just one year earlier.

The ETC market grossed 1.15 million units of sales by the end of June, more than threefold from the same month last year, according to the Organization for Road System Enhancement (ORSE,) which mainly gathers ETC and other road-technology information.

Nevertheless, the number of vehicles is still too low to have any effect on traffic jams. The transport ministry considers that at least 50 percent of vehicles need to be equipped with transponders to make a difference. The ministry installed the ETC system at 900 tollgates nationwide by March and plans to expand it to basically all the expressway gates by the end of this fiscal year.

Many argue that the ETC system needs a significant change in its price to catch on further. Yet the bureaucrats are fairly optimistic:ORSE claims that the now popular GPS car navigation system, which boasts 11.5 million unit sales as of March 2003, took six years to reach one million. On the other hand, the ETC system took only two years and three months to break the one million record.

The ETC system is only a part of the ministry's overall plan to promote smoother traffic flow called the Intelligent Transport System (ITS). Tying up with the information technology industry, the ITS project which spans over a decade, is estimated to generate JPY50 trillion.

As the traffic control speed increases at the ETC gates, the number of manned booths and related costs could be cut. Lower costs mean smaller and more affordable highway interchanges. The 200 rural communities that don't have access to the highways would be able to build interchanges and bring money to their local economies. And the service and parking areas by the expressways would be more convenient with the ETC gates installed, according to the ministry's Web site.

Furthermore, the ETC system in Japan, which uses 5.8GHz interactive communication at close range, enables tracking each vehicle's route and applying on-demand pricing policies. Discount services could be offered for avoiding the most congested hours or districts in order to control traffic on the expressways.

The congestion-free ETC system could also be integrated to enhance the "Road Pricing by Environment" project, as its trial has already taken place on some parts of the Shuto Expressway and Hanshin Expressway. This project provides toll discrepancies between two parallel roads to move traffic to the outer bayside, and is aimed at improving the residential environment through inner-city highways.

As for the transport ministry's grand blueprints, studies are in progress in many other areas, such as paying bills at parking lots, gas stations and other drive-through businesses. Yet, there is no immediate prospect of private-sector companies moving into such businesses. Despite Japan's wireless wonders via mobile phones, wireless technologies on the road are miles away. @