While the road pricing system began in 1975, a more sophisticated electronic road pricing system (ERP) was introduced in 1998. Singapore was the first country in the world to use the ERP system for traffic management.

The most congested part of the city (the Restricted Zone or RZ) is surrounded by an electronic boundary demarcated by ERP overhead gantry signs. All vehicles -- except emergency vehicles -- have to pay a fee to enter this area from 7:30am to 7pm on weekdays. ERP fees vary depending on the time of day and the kind of vehicle driven.

Fees are automatically deducted from stored value smart cards ("CashCards") which are inserted in a device called an Invehicle Unit (IU). Almost all vehicles in Singapore, including motorcycles, have this device installed.