Europe's mobile telephone market may be sagging but Dutch tech doyen Roel Pieper thinks he knows what the next market driver will be: a new type of wireless device installed in every vehicle in the Netherlands and eventually, he hopes, all across Europe. Pieper is the man behind MobiMiles (www.mobimiles.nl), a plan recently approved by the Dutch government that calls for a projected 10 million cars, trucks and motorcycles to be equipped with wireless tracking devices by 2006. The idea is to revamp the way up to $6 billion in road and vehicle taxes are collected.
Dutch drivers currently pay a 25% sales tax on new cars, a vehicle tax based on the price and weight of the car, plus a road tax based on the weight of the vehicle and the type of fuel used. With MobiMiles, all of these taxes will be replaced by a system that uses global satellite positioning and other wireless technologies to charge drivers on a pay-as-you-go basis. Initially, drivers will be charged a flat price per kilometer but later fees may depend on road categories and time of day. Motorists who use major arteries during rush hours might be charged the maximum, while those who use alternative routes or drive during off-peak periods might be rewarded with discounts. If the technology is accepted by consumers, the system might just catch on across Europe as goverments shift from flat road taxes to user fees.
Already, the Swiss government is placing wireless tracking devices in 60,000 trucks as part of a new road usage fee system that will bring in $424 million annually. Germany plans to put devices in trucks in 2003, with the new road usage tax expected to affect some 1.2 million vehicles. The Dutch are the first, though, to approve a plan that includes all vehicles.
Pieper, a former executive with Philips and now managing director of the European arm of venture capital firm Insight Capital Partners, believes MobiMiles will re-energize the mobile market. That's because the scheme will require people to install a new mobile device in their vehicles. These devices which will be smaller than cell phones and only used for data communications rather than voice are likely to be produced by traditional makers of mobile phones, such as Siemens, Ericsson and Nokia. "In the Netherlands alone we are talking about 10 million additional mobile devices I'd call that a pretty big market mover," says Pieper. Governments and service providers will probably end up subsidizing some of the cost. Drivers will pay the rest. While the tracking devices used for trucks in Switzerland cost about $848 apiece, the Dutch hope to get the cost down to around $85.
Pieper hopes MobiMiles will not only tally taxes but provide a platform for new in-car mobile services, such as automatic payment of parking fees, yellow page information, maps, and hotel and restaurant bookings. The service could also serve up local traffic information, warning drivers of gridlock and suggesting the best alternative routes. Currently, most navigation systems are only included in luxury cars and do not include two-way data communications, says Vincent Everts, one of Pieper's partners on the project.
To provide a basis on which to calculate fees, Pieper proposes a digital map of the Dutch motorway system divided into up to five colors, each one representing a price category. Charges will be tallied in the car, with the device issuing a bill at regular intervals. Payment options are likely to include an "electronic wallet" that can automatically debit a driver's bank account.
Because only the category and not the actual location of the road is recorded, supporters of the system claim that it will not infringe on drivers' privacy. But some have their doubts. "Our concern is that this kind of technology can be used to register or monitor the precise whereabouts of individual cars unless you take specific technical measures to ensure anonymity," says Gert Onne van de Klashorst, a spokesman for the Dutch Data Protection Authority in the Hague. "Color coding is not enough. You need to introduce privacy protection technology that will make it impossible to match invoice data with whereabouts."
Pieper plans to head a consortium to help European governments and the tech industry develop wireless tracking systems. The consortium will have to convince other countries to follow the Netherlands' example, though. So they plan to stage what else? a road show.