COIN MACHINES:A Continuing if Smaller Role with Sacagewea

Coin machines have declined on US toll roads because of the decline in US coinage. The failure of the US Government to get a larger coin than the quarter into general circulation has meant that as inflation has taken toll rates higher coins have become increasingly cumbersome as a payment mode. Beyond about three coins, an ACM becomes a pain both to the tollster and to the tolled. The necessary coins become a nuisance for motorists to assemble, more difficult to throw into the basket, slower to be counted and more liable to jam, we heard again and again.

Florida Turnpike has a firm policy to scrap ACMs when a toll requires more than 3 coins, so whenever a toll advances from 75 to $1.00, it’s out with the ACM. Of course there are tokens – a kind of toll agency coinage – priced to allow a toll to be paid at an ACM with a single slug. Agencies with a multi-dollar toll have been unable to collect much coinage in coin machines but a few adopted tokens. ET is now substituting for tokens for commuters. New York City’s Triboro Auth scrapped all 112 ACMs early this year as ET tags became the only way to get a commuter discount. Other agencies like Florida Turnpike say they need extra lanes for ET and that ACMs will be squeezed out for dedicated ET.

Some of the largest toll authorities use trip tolling for all or major portions of their facility - Florida Turnpike, New Jersey Turnpike, New York State Thruway, Massachussets Turnpike, Pennsylvania Turnpike, Ohio Turnpike, Indiana Turnpike. In these portions the predominant method of toll collection is the magstripe ticket recording the motorist’s entry point handed on exit to the toll collector and manual payment. ETC is now moving into trip tolls. ACMs are not used in trip tolling at least in the US. In some European countries and Japan they have change giving toll machines that take coins by slot and bills too.

The general trend away from trip tolling to point tolling can help ACMs, offsetting to some extent the displacement effect of ET. The Maine Turnpike deployed ACMs for the first time last year when it abolished its trip system and instituted point tolls along with ET. It now operates 35 ACMs. The Pennsylvania Turnpike’s new toll roads use barriers and it now operates 62 ACMs. Within the next ten years the Penna pike could go to something like 150 ACMs as new toll roads are opened south of Pittsburgh and as sections of the east-west mainline are converted to point tolls from tickets.

ACMs remain attractive to agencies which operate toll roads with barrier and many ramp plazas. They are a huge advantage at night when toll collectors wages can hardly be justified by small traffic volumes, especially at ramp plazas. Coin machines seem likely to be continued at these low traffic toll points, at least until Highway 407 (Toronto) style license plate recognition & bill-by-mail catches on. Or some kind of universal electronic ‘purse’ or transponders built into all vehicles. The use of smartcards in transponders has been adopted in Singapore for its universal electronic road pricing system, but it is not clear that this will adopted widely outside the city state. AT&T attempted a decade ago to market a transponder and smart card in the US and it was briefly implemented on the first toll roads in southern California. The project was generally considered a clumsy fiasco.

Sacagewea

The US Mint plans to release the new Sacagewea $-coin early 2000. Sacagewea is the Shoshone guide who enabled the Lewis and Clark expedition to negotiate the help of Indians along the way and to successfully cross the Sawtooth mountains of Idaho into what is now Washington state in 1805. By law the Sacagewea-$ will have to be similar in size and weight to the Susan B Anthony $-coin but it will be goldish in color and have a distinctive edge. The Anthony was rejected in part because it was not different enough from the quarter. But it remains to be seen how widely the Sacagewea circulates since there are no firm plans to withdraw the $-bill. Most successful transitions from bill to coin – as in Britain, Canada and Australia – have followed removal of the bill from circulation. This was previously deemed politically unthinkable in the US, at least ahead of widespread acceptance of the coin.

Jim Benfield, the lobbyist for the Coin Coalition has worked the $-coin issue in Washington DC for a decade. He says there is a now a chance of the $-bill being withdrawn. The Treasury is now more conscious of the great cost of printing, counting and distributing $-bills, and the economic advantage of coins. Moreover though the Anthony-$ coin was initially a failure, it has established a solid niche market in the past five years or so.

Benfield says that much as he would like to claim personal responsibility for the new $-coin as a mark of his persuasiveness as a lobbyist, in fact the decisive factor in its introduction was the demand for more $-coins in the marketplace: “The US Mint really wasn’t interested until they realized that demand for the Anthony was quietly building and that they would exhaust their stocks. The Sacagewea is really just a pickup on a belated modest success of the

Anthony.”

Niche for Anthony

It seems the Anthony while not in general circulation has niche markets at the cafeterias and among the vending machines of large companies, on university campuses, in hospital complexes, and at the US Postal Service. The original stock of Anthonies, for long an embarrassment to the Mint, will be completely exhausted some time in 1999.

How widely the new $-coin circulates will depend a lot on whether shops decide to give it as change rather than a $-bill. It is shopkeepers in their regular visits to banks for change who really decide what notes and small coin circulates in the economy, because not many ordinary customers will cavil at the makeup of change.

The Sacagewea’s future in tolling is unclear. The $-coin will be welcomed by the Harris County Toll Road Authority (HCTRA). It has 8 mainline plazas charging $1.00 for cars and one charging $2.00. HCTRA, unlike the Triborough in NYC, made the decision on converting to ETC, to retain ACMs. It has space at its toll plazas for the extra lanes needed to offer the three payment mode options. It is attempting to encourage its patrons to adopt ETC and has been increasing its toll rates for manual payment and for tokens while keeping the ETC charge stable. But it installed completely new ACMs just two to four years ago at the same time it introduced ETC so it figures they still have a significant role. ACM use is currently split about equally between coin and tokens at HCTRA. It is now the largest grossing toll agency of the south. Some of its staff favor abolishing tokens like the Triborough, and this might make sense if and when the $-coin becomes a heavily circulating coin. The ACMs would then become pure coin machines.

One way tolling

Bridges and tunnels have never made much use of ACMs, in part because of the toll being too many quarters. The wave of conversions to one-way tolling on bridges usually saw tolls at least doubled, making coin payment even more impractical. Neither Caltrans nor the Golden Gate bridge have made use of ACMs in the Bay area (though some were tried out on the Carquinez – which seems to be test-bed for new technology.)

Many bridge authorities have tolls of, or close to (and therefore likely to be raised to) $1.00. Delaware and Maryland at the DE/PA border toll I-95 cars at $1.00/direction or $2.00 one way. But at bridges there is generally a tradition of manual toll collection. The newer toll roads such as those in southern California have higher tolls at mainline plazas but charge 25,50,75c at ramp plazas which are generally unmanned, and ACM-equipped, because of their relatively small throughput.

The new $-coin if successful could extend this niche market for ACM a bit. Low volume ramp plazas where manned toll booths will not be warranted, yet which have to cater to those without transponders are always a good ACM market. Visitors to an area, tourists and business travelers are generally not going to get transponders. Toll facilities which have tolls of 50c and 75c but which need rebuilding and enlargement are likely to raise their tolls to $1.00. They may be encouraged to keep and upgrade their coin machines by the possible appearance of the new $-coin. And there will always be those patrons who prefer the anonymity and simplicity of paying on the spot to establishing an account and arranging monthly payments, for whom collector or coin machines will be the payment modes of choice. (Contact Jim Benfield, Coin Coalition, 202 783 5588)