Sales of K-TAG starter kits from Sept. 1 to 15 through selected retail locations, as reported by the Kansas Turnpike Authority:
• Dillons: 1,080, including 143 at four stores in Lawrence; 274 at stores in Topeka; and five at a store in Leavenworth.
• Walgreens: 1,043, the total for 50 participating stores in Kansas (the turnpike would not disclose details for specific locations).
• AAA: 222, including 37 at an office in Lawrence and 109 at an office in Topeka, the most for any single retail location in Kansas.
Each starter kit costs $15, and includes $10 in toll credits. Retailers keep $1.50 from each sale.
While an impending increase in tolls for cash-paying customers on the Kansas Turnpike is driving dozens to sign up for using an electronic-payment system, the technology upgrade won’t include partnerships with toll roads across state lines.
Drivers increasingly are turning to the turnpike’s K-TAG system to pay monthly bills, instead of having to make cash payments during stops after each trip. During the first two weeks of this month, drivers bought more than 2,300 new tags at AAA, Dillons and Walgreens locations — adding to the 42.5 percent of turnpike travelers who already had been reliant on K-TAG to calculate their bills.
Drivers now have even more incentive to sign up for the electronic payment system, as tolls for drivers paying cash will see their tolls rise by an average of 15 percent beginning Oct. 1. Tolls for commercial customers will go up by an average of 5 percent.
K-TAG customers won’t see their bills go up at all, even as new K-TAG subscribers ending up paying as little as $5 for new electronic readers that cost the Kansas Turnpike Authority $12.50 each.
Consider it economic encouragement.
“We’re selling it at a loss,” said Lisa Callahan, a turnpike spokeswoman. “We’re willing to lose a little bit of money (on the K-TAG reader) to move cash customers into the K-TAG lane.”
That’s because K-TAG is more efficient and less expensive for the turnpike authority to operate, as compared to cash transactions. Drivers move through faster. Their transactions are handled by fewer personnel.
But the K-TAG efficiency looks to be limited to the turnpike itself, at least for now.
While other states are working on programs to coordinate payment systems — so that their customers could use their readers to calculate and pay tolls on other toll roads and turnpikes — officials at the Kansas Turnpike Authority are skeptical of such coordination making sense in the Sunflower state.
At least for now.
“We’re part of a group of toll businesses that have looked and are looking at issues of interoperability,” said Michael Johnston, the turnpike’s president and CEO. “That’s well down the road. That’s not imminent. Eventually we’ll get there, but there are a lot of details. The devil’s always in the details.
“We could do it tomorrow. Technology is not the impediment. The costs really are.”
New programming, back-office adjustments and related changes might cost $300,000 a year but would not be expected to “generate one additional dollar of revenue,” he said.
“That,” Johnston said, “wouldn’t be a wise business decision.”
Instead, the turnpike authority will rely on shifting as many turnpike customers onto K-TAG to increase the system’s efficiency, he said. K-TAG launched in 1995, and its ability to move drivers through toll plazas with increased speed — anywhere from three to five times faster than a cash-paying customer — has enabled the authority to avoid some major capital costs.
“If we didn’t have the electronic system today, we would have had to spend millions of dollars on lanes and facilities to handle customers,” he said. “It’s an opportunity to be more efficient.”