Mileage Registration Pay-as-You-Drive

The government aims to introduce a simple designed mileage fee starting from 1st January 2030: a flat rate for all miles driven, without distinction based on time and location. This requires the simplest possible mileage registration system. The central consideration revolves around accepting the risk of odometer manipulation versus the costs and complexity of the registration system. A system based on the existing odometer in a vehicle is simple, with relatively low costs, but not guaranteed to be fraud-proof. A system with on-board units (devices in vehicles) reduces opportunities for odometer manipulation, but is challenging to implement and relatively costly. In the coalition agreement of Rutte IV, it was agreed to implement Pay-As-You-Drive (PAYD) from 1st January 2030 to replace the current motor vehicle tax. This shifts the focus from ownership to the usage of the car for billing. The proposal for PAYD involves a non-time and non-location-based fee for all miles driven by all Dutch passenger cars and vans. This requires a mileage registration system that records all miles driven by a vehicle. Dialogic, in collaboration with Decisio and TwynstraGudde, has conducted research on potential mileage registration systems for PAYD. In this study, different systems were analysed and compared. A mileage registration system can be based on the current odometer reading in a vehicle or through a special device (on-board unit, OBU) that needs installation. Both types of systems have disadvantages. A system based on the odometer is simple, with relatively low costs, but not guaranteed to be fraud-proof. A system with on-board units reduces opportunities for odometer manipulation significantly but is complex to implement and relatively expensive. The central consideration therefore revolves around accepting the risk of odometer manipulation versus the costs and complexity of the mileage registration system. Currently, there remains uncertainty about the extent of the risk of odometer manipulation, partly because the Dutch PAYD proposal has not been implemented elsewhere in the world, and also because the specifics of PAYD are not yet clear. Which vehicles will pay which rates in the future? And what is the level of support for the final implementation of PAYD? These factors influence the motivation and rationalisation of potentially fraudulent behaviour. The registration system only affects the opportunity, that is, how easy it is to manipulate odometer readings. Given the uncertainties and the desire to introduce the simplest possible Pay-As-You-Drive system, additional research is being conducted to assess whether registration based on the odometer in the vehicle can be sufficiently reliable. Downloads: Public version of the mileage registration study Background report on the mileage registration study Cover letter to the Second Chamber dated 19th January 2023