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Article: Nonlinear pricing of taxi services

TitleNonlinear pricing of taxi services
Authors
KeywordsMarket Equilibrium
Nonlinear Pricing
Pareto-Improving
Taxi Service
Issue Date2010
PublisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/tra
Citation
Transportation Research Part A: Policy And Practice, 2010, v. 44 n. 5, p. 337-348 How to Cite?
AbstractThis paper examines the effects of nonlinear fare structures in taxi markets using an extended taxi model with an explicit consideration of perceived profitability. The expected profit, defined as the profit per unit time (inclusive of both occupied and vacant taxi times), that a taxi driver expects to receive from picking up a customer in a particular zone or location, has great impact on the taxi driver's choice of location in the search for customers. The fare structure directly governs the profitability of taxi rides of different distances originating from different locations. With these explicit considerations, the extended model is intended to look into the market effects of adopting a nonlinear fare structure with declining incremental charges. The proposed nonlinear fare structure could help restore a level-playing field for taxi operators whose businesses have been affected by some taxi drivers who resort to practices such as offering fare discounts or accepting requests for discounted fares from passengers for long-haul trips. Analysis of sensitivity of social welfare and profit gain as well as taxi/customer wait/search times is conducted with respect to the parameters in the nonlinear fare structure for the Hong Kong taxi market, and Pareto-improving nonlinear fare amendments are identified that neither disadvantage any customer nor reduce the taxi operators' profits. © 2010 Elsevier Ltd.
Persistent Identifierhttp://hdl.handle.net/10722/150524
ISSN
2015 Impact Factor: 1.994
2015 SCImago Journal Rankings: 1.810
ISI Accession Number ID
Funding AgencyGrant Number
Hong Kong Special Administrative Region (HKSAR), ChinaRGC HKUST 6212/07E
University of Hong Kong
Funding Information:

The authors wish to express their thanks to the Editor-in-Chief and two anonymous reviewers, whose useful comments have improved the exposition of the paper. The research described in this paper was substantially supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region (HKSAR), China (Project No. RGC HKUST 6212/07E) and an outstanding researcher award from the University of Hong Kong.

References

 

DC FieldValueLanguage
dc.contributor.authorYang, Hen_US
dc.contributor.authorFung, CSen_US
dc.contributor.authorWong, KIen_US
dc.contributor.authorWong, SCen_US
dc.date.accessioned2012-06-26T06:05:26Z-
dc.date.available2012-06-26T06:05:26Z-
dc.date.issued2010en_US
dc.identifier.citationTransportation Research Part A: Policy And Practice, 2010, v. 44 n. 5, p. 337-348en_US
dc.identifier.issn0965-8564en_US
dc.identifier.urihttp://hdl.handle.net/10722/150524-
dc.description.abstractThis paper examines the effects of nonlinear fare structures in taxi markets using an extended taxi model with an explicit consideration of perceived profitability. The expected profit, defined as the profit per unit time (inclusive of both occupied and vacant taxi times), that a taxi driver expects to receive from picking up a customer in a particular zone or location, has great impact on the taxi driver's choice of location in the search for customers. The fare structure directly governs the profitability of taxi rides of different distances originating from different locations. With these explicit considerations, the extended model is intended to look into the market effects of adopting a nonlinear fare structure with declining incremental charges. The proposed nonlinear fare structure could help restore a level-playing field for taxi operators whose businesses have been affected by some taxi drivers who resort to practices such as offering fare discounts or accepting requests for discounted fares from passengers for long-haul trips. Analysis of sensitivity of social welfare and profit gain as well as taxi/customer wait/search times is conducted with respect to the parameters in the nonlinear fare structure for the Hong Kong taxi market, and Pareto-improving nonlinear fare amendments are identified that neither disadvantage any customer nor reduce the taxi operators' profits. © 2010 Elsevier Ltd.en_US
dc.languageengen_US
dc.publisherPergamon. The Journal's web site is located at http://www.elsevier.com/locate/traen_US
dc.relation.ispartofTransportation Research Part A: Policy and Practiceen_US
dc.subjectMarket Equilibriumen_US
dc.subjectNonlinear Pricingen_US
dc.subjectPareto-Improvingen_US
dc.subjectTaxi Serviceen_US
dc.titleNonlinear pricing of taxi servicesen_US
dc.typeArticleen_US
dc.identifier.emailWong, SC:hhecwsc@hku.hken_US
dc.identifier.authorityWong, SC=rp00191en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/j.tra.2010.03.004en_US
dc.identifier.scopuseid_2-s2.0-77952097435en_US
dc.identifier.hkuros170655-
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-77952097435&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume44en_US
dc.identifier.issue5en_US
dc.identifier.spage337en_US
dc.identifier.epage348en_US
dc.identifier.isiWOS:000277900500005-
dc.publisher.placeUnited Kingdomen_US
dc.identifier.scopusauthoridYang, H=35249804200en_US
dc.identifier.scopusauthoridFung, CS=36086155400en_US
dc.identifier.scopusauthoridWong, KI=7404760031en_US
dc.identifier.scopusauthoridWong, SC=24323361400en_US
dc.identifier.citeulike7057286-

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