Indeed. It doesn't allow differential pricing per road type. Driving 10 miles through London is almost certainly worse than 10 miles down a country a road in terms of impact. Is that something worth giving up everyone's privacy? I personally don't think so, and I'm not even particularly privacy conscious.

Might that be more open to fraud than a telematic solution? Doubtful. Those people who would attempt to commit fraud that way will be just as likely to do so otherwise.