Modeling and Analyzing Taxi Congestion Premium in Congested Cities

Traffic congestion is a significant problem in many major cities. Getting stuck in traffic, the mileage per unit time that a taxicab travels will decline significantly. Congestion premium (or so-called low-speed fare) has become an increasingly important income source for taxi drivers. However, the impact of congestion premium on the taxicab market is not widely understood yet. In particular, modeling and analyzing of the taxi fare structure with congestion premium are extremely limited. In this paper, the authors developed a taxi price equilibrium model, in which the adjustment mechanism of congestion premium on optimizing the taxi driver’s income, balancing the supply and demand, and eventually improving the level of service in the whole taxicab market was investigated. In the final part, the authors provided a case study to demonstrate the feasibility of the proposed model. The results indicated that the current taxi fare scheme in Beijing is suboptimal, since the gain from the raise of congestion premium cannot compensate for the loss from the demand reduction. Conversely, the optimal fare scheme suggested by the model can effectively reduce the excessive demand and reach the supply-demand equilibrium, while keeping the stability of the driver’s income to the maximum extent.


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  • Accession Number: 01647129
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Sep 27 2017 10:20AM