Multiple Period Optimization of Fare and Vacancy Rate for a Cruising Taxi Market
Date Issued
2008
Date
2008
Author(s)
Shen, Ta-Wei
Abstract
Taxi is defined as the paratransit in the urban public transit systems. Compared with conventional mass transit systems, taxi is featured with convenience, speediness, door-to-door, privacy and comfort; so it has become a popular mode in urban area. Because taxi service is involved with public welfare, there are lots of issues should be planned and managed properly, such as fare system, industry structure, driver qualification and plate grant. Therefore, many researches had established the optimization models to improve the taxi industry. However, most of those studies didn’t consider the difference of market between peak and off-peak hour, but the excess supply makes vacant taxis inefficiently cruise in off-peak hour. In other hand, the single fare system now might cause unfair subsidy between trips in peak and off-peak hour. Cause of above problems, this study develops an optimization model involves multiple period fare and the concept of idle cost which can reduce the excess supply in off-peak hour. Through the model we can find the optimal equilibrium of taxi market, the optimal fare and vacancy rate at each time period. In the study, we use the operation data of taxi market in Taipei metropolis as a case. The numerical results show that in order to maximize the social welfare and balance the revenue and expenditure, the second-best solution should be the most appropriate operation mode. If the price elasticity in peak, off peak and midnight is -1.33, -1.4, -1.47 respectively, and the waiting time elasticity is -0.22, -0.2, -0.18, then the optimal fare will be 53.78 $/km、33.84 $/km、31.09 $/km respectively, the optimal vacancy rate will be 40.0%、33.3%、27.7%, and the fleet size of taxicabs in Taipei metropolis should be 39,728(reduced by 15,599 from now) under the assumption that the daily average operation hour of taxi drivers is 8 hours. It shows that there are truly too much taxis in Taipei metropolis now. As the results of multi-period market optimization model, we can improve the social welfare by providing fewer taxicabs, and then keep the vacancy rate at the optimal level in each time period. Through the model, we can get a triple win solution between operator, customer, and government department.
Subjects
taxicab, multiple period
optimization
analytic model
idle cost
vacancy rate
Type
thesis
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