There are roughly 5,000 miles of toll roads in America, lined with thousands of tollbooths. It may seem like they’ve been there forever—a familiar, if at times frustrating, pit stop for drivers in 35 states.

Yet it was only 80 years ago this month that America’s highways changed forever. On the early morning of October 1, 1940, the first modern tollbooth opened just east of Pittsburgh, Pennsylvania. And as with many history-defining moments, IBM was there, installing its industry-setting toll collection equipment. It helped accurately record when vehicles entered and left the country’s first superhighway.

An early New York City toll ticket shows punch holes for machine reading.

Decades later, many of these booths are closing, replaced by automated technology that keeps traffic moving and honking to a minimum. And while toll collecting is changing, IBM’s involvement remains constant.

As the world emerges from the pandemic of COVID-19, how, where and even whether we travel through our cities and countryside has never been more important. The efficient movement of people on tolled roads and transit is likely to go through yet another major shift, and the involvement of technology will play as central a role as ever in the carriage of people and commerce.

“We’ve always been pushing technologies to its limit to deliver new kinds of mobility services,” Miro Holecy, a distinguished engineer and CTO for transportation at IBM, said on a recent episode of Ideagen. “But I can see that, with IoT, AI, blockchain, etc., the maturity of technology has reached a level where technology is not battling us anymore. Only our imagination is our limit. But challenges—they’re still there. And primarily, these challenges are organizational, political and also commercial.”

It’s an evolution, just like the punch cards and toll agents that have given way to RFID readers, AI-powered cameras and free-flowing traffic. Congestion pricing, in places like Stockholm, Sweden, is helping not only reduce traffic but better manage it, thanks to machine learning and cognitive systems, while raising much-needed funds for mass transit.

“Everyone hates traffic, but typically they only see it from their own personal perspective,” Donovan Guin, US tolling lead, also said on Ideagen. “The unfortunate reality is that traffic has a large negative impact on our communities, while dragging down the economic viability for entire regions and our world.”

From toll booths to toll bots

One of the first toll booths, on display at the State Museum of Pennsylvania.

The first tollbooths and tolling systems were a necessary response to a growing population, which led people to move further and further away from city centers. People and businesses desired a vast, interlocking highway that offered connection and commerce. Local governments needed a way to fund and manage these highways, as well as tunnels and bridges, since national investment did not take place until the late 1950s; hence, the turn toward tolling.

Throughout this era, IBM worked to further innovate on tolling technology. The 1950s saw validated tickets on the Oklahoma Turnpike that could report on the number of vehicle axels, which allowed states to accurately assess the rate a driver would be charged. IBM also built the first toll collection system with dynamic weight classifications, further helping municipalities in generating revenue.

Punch cards and punch tickets remained the de-facto format for tolling until the late 1960s. That was when tickets moved onto data tape, also known as the magnetic stripe or strip, another IBM innovation (you probably have a few in your wallet right now, in the form of the swipey strips on credit cards). These striped paper cards brought tolling into the digital age, and allowed for tolling systems with greater reliability, reusability and configurability. Where physical toll booths are still being operated, mag stripes largely remain in use to this day.


Starting in the late 1980s, boothless tolling—known in the industry as “freeflow tolling”—started its proliferation, with RFID transponders in vehicles allowing drivers to breeze through toll gates at 15 miles an hour. These laid the groundwork for congestion pricing two decades later—though it was innovative thinking was perhaps even more important than innovative hardware.

“You have to not make congestion pricing about technology—make it about the outcome,” Holecy said. “I have seen many congestion charging initiatives around the world, which got very tangled in the technology conversation, and because of that, the idea of congestion pricing never lifts off. Also, there is a strong need to be transparent, about how the money will be used, where the money will go.”

Drivers were skeptical of plans to toll every major route into the central business district of their cities. If these surface roads were to carry a fee, it had to be seamless. Having drivers queue up would not only have caused unending traffic, but unending outrage that would have likely led to the system’s collapse.

Instead, the new systems IBM helped build or operate in Stockholm, Singapore and London became a popular success. After years of debate, New York City plans to roll out the first major congestion plan in an American city within the next couple of years.

Superhighways in the cloud

For smart cities, the future looks bright.

Population trends continue to drive the future of tolling.

Today, increasing urbanization is adding greater complexity to the suburban sprawl that has defined most of the second half of the 20th century. More than half the world’s population now lives in cities, generating almost two-thirds the world’s carbon emissions. Traffic has reached record levels, threatening the ability for our economies to grow. It seems obvious that the transportation systems and infrastructure designed for a 1950s world cannot address what a 21st century world needs.

A holistic approach is emerging that not only focuses on tolls, but integrating traffic management, open space and air quality metrics, walkability, commerce, parking regulations and access, even near-term autonomous vehicles. So not just smart cities but sustainable ones in every sense.

The foundation of such cities continue to be built on the technologies and ideas laid down on the highway outside Pittsburgh 80 years ago.

More people means more modes of transit means more nodes to manage it all.

Communities are now ringed with sensors and cameras, and the vast data therein demands the kind of flexible, responsive storage only found on the cloud. AI embedded on that cloud is what manages and processes that information at speeds that were once unfathomable. Edge devices keep the communication and processing flowing at near instantaneous rates—essential when multi-ton objects are hurtling around. And blockchain can help route and track information and even transact associated charges.

“Congestion pricing is just one use case,” Holecy said, “but we want to combine multiple other mobility solutions together, to analyze all data, and providing insights from that, with the aim to change the associated behavior of citizens and businesses.”

These technologies, then, are not only a means to manage traffic and raise transit funding. They also engender trust with the public, and a vision for the future, a vision that is more urgent than ever.

“While cities only account for about 2 percent of the world’s land mass, they account for 70 percent of the world’s carbon emissions.” Guin points out. “If we can’t slow down the growth of carbon emissions in the cities, we won’t be able to make significant progress about our climate. So when you look at it from that perspective, traffic is a perfect place to focus our energies.”

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