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Trans. Planning Journal
| Title | Optimal Fare and Unoccupancy Rate for Taxi Market |
|---|---|
| Author | Shyue-Koong Chang, Shih-Ming Huang |
| Summary | This paper aims to develop demand and cost function in the consideration of demand and supply attributes in a taxi market. The optimal fare and unoccupancy rate are simultaneously determined for maximum social welfare objective with a break-even constraint. Unoccupancy rate is one of the service quality attributes for taxi. Which will affect the quantity of demand and has great influence on operator cost and fare. With the assumption that demand function is the form of Cobb-Douglas, it is found that the optimal unoccupancy rate is the function of price elasticity, waiting time elasticity, and the sensitivity of vacant mileage with respect to waiting time. It is also found that price elasticity is the most effective factor while the optimal fare is function of those elasticity parameters affecting unoccupancy rate plus operating cost. Results of numerical case indicate that the optimal unoccupancy rate is around 33%. In the situation that each vehicle operates 8 hours per day, the optimal number of taxi is 52,142, which is significantly lower than the registered number 69,164 in Taipei City by February 2001. Sensitivity analysis indicates that price elasticity has great influence on the optimal social welfare. As the unoccupancy rate is around 30% to 40%, the difference of social welfare is comparatively small. Results of this study can be used as guidelines for formulating taxi management policy. |
| Vol. | 32 |
| No. | 2 |
| Page | 341 |
| Year | 2003 |
| Month | 6 |
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