Premium electric taxis : modeling and policy insights

Abstract

Taxis provide flexible and round-the-clock transport services. Despite their convenience, the conventional taxi fleet of internal combustion engine vehicles contributes to the roadside emissions of pollutants and greenhouse gases. They also consume large quantities of fossil fuels. In many metropolitan cities, such as Hong Kong, taxis cruise the streets in search of customers. This behavior worsens traffic congestion and environmental impacts. Meanwhile, as a personalized mobility service, the improvement of service quality is a major concern of the industry. The customers are also seeking differentiated taxi services for their various needs and budget, resulting in a growing trend of segmented services catering to different market niches.

Many studies have shown that electrifying the taxi fleet is effective in reducing carbon footprint and roadside pollution; however, the high ownership cost of electric taxis constrains their deployment. Government subsidy has been sought in many applications, yet the required amount can be enormous and is infeasible in many jurisdictions. Therefore, this thesis proposes to convert a portion of the existing taxi service into electric taxis as a premium service operating in a dispatching mode. Customers are charged higher fares to increase the income of the drivers who provide high-quality services while offsetting the high ownership cost for the taxi owners. Government subsidy can also be rationalized through the premium fare structure. Moreover, the dispatching mode ensures service reliability and maximizes the drivers’ revenue-making hours by adopting multiple fast-charge sessions throughout a day. All stakeholders can, therefore, share the financial burden while gaining benefits in their respective areas.

This thesis takes Hong Kong as a laboratory to investigate the industry’s response to this renewed and integrated approach to address the environmental and service issues. Questionnaire surveys were conducted with 842 taxi drivers, 167 taxi owners, and 1,410 taxi customers to uncover the factors underpinning the choice behaviors of the different respondent groups between conventional taxis and premium electric taxis. Multiple binary logistics regression models are calibrated. The result shows that cost, benefits, and time were the most influential factor categories in their preferences. Sensitivity analyses are also conducted to reveal the importance of the provision of charging facilities in influencing the stakeholders’ choices.

The choices of all stakeholders are connected and interdependent and are affected by government policies. An equilibrium model is proposed to determine the differences of the percentage-of-switch of the vehicles and the percentage-of-switch of the customers under different government subsidies and market conditions. Having incorporated all stakeholders’ interests, government policies, and the existing operations in a single model, taxi-customer meeting efficiencies in street-hailing and dispatching modes can be evaluated, and the consequences of various policy trade-offs in subsidization, infrastructure input, and fare structures on switching from conventional taxis to premium electric taxis can be predicted. Transport policy implications in enhancing taxi service quality and reducing roadside emissions are elaborated.