Institute of Transportation, MOTC

       This study develops a pricing model for the fare of public rapid transit. The major contributions are two folds. First, we develops the model for two demand functions with two riding distances. The prices of travelcard and one-way ticket for long riding distance and short riding distance will interact with each of the demand functions. Second, the riding transit preference of various income groups will influence the transit pricing and welfare changes. Differing from Jara-Díaz et al., our model proposes a more general analyzing approach by employing different selection order of income groups under the condition of different ticket prices for the data not satisfying the reverse relationship. Thus, this approach can be applied to any case of this problem. Moreover, our model is then applied to the case of the Taipei Metropolitan Area by dividing into two areas based on ticket charges for long and short commuting distance passengers to purchase. This study pursues maximum social welfare with the constraint of revenue being equal to cost for the optimal pricing. The results of the study show that in the pricing rules, the social welfare and estimated ridership obtained from the implementation of the travelcard policy will be higher than that with no travelcard policy, which is consistent with Leland and Meyer.