Feb. 24, 2006 at 10:00 AM ET
Jackson He is a New York resident who liked the convenience of E-ZPass -- until New York state started removing an extra $1 from his account every month.
The fee was news to He, who just recently noticed it at the bottom of a list of itemized toll booth visits in his transaction statement. But actually, New York's Metropolitan Transit Authority began slipping the $1 fee onto his bills in July.
"The charge is small enough that most people may not realize," He said.
E-ZPass, the congestion-buster, the electronic wonder, the discount toll booth collector, always seemed like a great deal. Today, for Jackson and millions of other New York users, it’s not quite as good a deal. And in the future, the real price of E-ZPass for drivers all around the country could be quite a bit more.
Before I can be accused of making a mountain out of $1, let’s be clear -– this is not a $1 fee. It's a $12 annual membership tax, which drivers must pay for the right to pay tolls. The issue is starting to boil over in New York, and earlier this month, state Sen. Michael Balboni, R-Nassau County, introduced legislation that would roll back the fee.
But to me this $1 fee is a sign of things to come.
With E-ZPass, as with so many situations involving consumer privacy and disclosure, consumers do not face a fair choice -- not when the rules of the game can be changed. When you sign up for an E-ZPass, you do not know what you are giving away. When you agree to let a government contractor track your every move on highways across the Northeast, you do not know what possible consequence that could hold for you some day. Perhaps you believe you’ve received an agreement from your government that indicates the data collected will not be misused. Agreements, as you should know by now, can be changed.
What will next year's fee be?
Just ask Jackson He. When he signed up for E-ZPass, it cost him $1 a month less than it does now. And what choice do New York drivers have? There is no alternative electronic toll booth collection system to join. He and all other New Yorkers are captive consumers; that guarantees that the E-ZPass deal will only get worse as time goes on.
Today, the fee is $1. What will it be next year? That's one of the arguments put forward by Robert Sinclair, spokesman for AAA in New York. The association has roundly criticized both the Metropolitan Transit Authority and the Port Authority of New York and New Jersey for adding the $1 fee.
"We're being nickel and dimed to death," he said. Not long ago, New Yorkers were forced to pay a $1 surcharge on insurance policies to create a fund for fighting motor vehicle theft and insurance fraud. "Now it's a $5 surcharge." The rules were changed.
For those not in the Northeast's toll road zone, here's a bit of background. Toll booths create significant, frustrating bottlenecks all across the Northeast. E-ZPass users buy a small electronic device that broadcasts a radio signal and stick it on their windshields. Then, instead of digging through pockets for change, E-ZPass users just drive through toll booths -- sometimes at highway speeds -- and a computer automatically deducts the toll fee from their accounts.
Resistance is futile
E-ZPass has spread like wildfire, and it's now in 11 states. Like supermarket loyalty cards, the economic penalty for non-users is so high it is now almost impossible to avoid signing up with E-ZPass. The discounts are sizable. Drivers across New York's Tappan Zee bridge pay $4; E-ZPass users can pay only $2. Meanwhile, E-ZPass cuts their commute times significantly. And, the number of human-attended booths on roadways like the New Jersey Turnpike keeps dropping, making E-ZPass almost impossible to resist. What could be more coercive for non E-ZPass users on long lines than to watch wistfully as others fly through the electronic toll booths and speed on. Only a fool would resist E-ZPass.
But who is the greater fool? Recently, officials in Massachusetts said they would no longer replace E-ZPass devices that broke. Consumers now have to pay about $25 for new ones. Since battery life on the devices is 5-7 years, that's another fee all drivers will eventually have to pay for the right to pay tolls. Of course, the discounts offered through E-ZPass far outweigh the New York $1 fee, or the Massachusetts replacement fee. But for how long?
In an eloquently written note titled "Evils of E-ZPass and an Alternate Solution," blogger DonXML describes another problem with E-ZPass fees, discounts, and rules -- they obscure the true price of a toll. Drivers on the New Jersey Turnpike know they're paid $6.45 in cash to cross the state. It says so on their ticket. But E-ZPass drivers? The rate they pay is based on a formula, including discounts, penalties for driving at peak times, and who knows what else some day. Confusion always benefits the people who make the rules. Ultimately, price confusion will not be good for drivers in the northeast.
It’s never a fair deal when one party can change the terms after an agreement has been signed, and the other party can’t really get out of the deal. But the same cavalier changing-the-rule-in-the-middle-of-the-game attitudes should hint at much graver concerns. What about E-ZPass privacy promises?
Will the privacy rules be changed?
No doubt, you've heard stories about law enforcement agencies obtaining toll collection data to assist in investigations. In one reported case, 30 New York police detectives were reassigned after E-ZPass records suggested they were making false overtime claims. While there are obstacles that stand in the way of E-ZPass records at law enforcement officials, there are state legislative proposals designed to make the records even easier for investigators to scour.
It is hardly a long leap to imagine E-ZPass records could figure in divorce cases, private lawsuits, even other kinds of employee monitoring. In fact, it's likely we can't today imagine the potential privacy pitfalls of the data E-ZPass systems collect and store.
Of course, there are plenty of promises that the records will not be used in such frivolous ways, will not turn into some sort of de facto tracking too.
But then, the rules can change. When Jackson He signed up for E-ZPass, there was no monthly fee.