Market mechanism design for profitable on-demand transport services

On-demand transport services in the form of dial-a-ride and taxis are crucial parts of the transport infrastructure in all major cities. However, not all on-demand transport services are equal: not-for-profit dial-a-ride services with coordinated drivers significantly differ from profit-motivated taxi services with uncoordinated drivers. In fact, there are two key threads of work on efficient scheduling, routing, and pricing for passengers: dial-a-ride services; and taxi services. Unfortunately, there has been only limited development of algorithms for joint optimization of scheduling, routing, and pricing; largely due to the widespread assumption of fixed pricing. In this paper, we introduce another thread: profit-motivated on-demand transport services with coordinated drivers. To maximize provider profits and the efficiency of the service, we propose a new market mechanism for this new thread of on-demand transport services, where passengers negotiate with the service provider. In contrast to previous work, our mechanism jointly optimizes scheduling, routing, and pricing. Ultimately, we demonstrate that our approach can lead to higher profits and reduced passenger prices, compared with standard fixed price approaches, while also improving efficiency.     

Geometric matching and spatial pricing in ride-sourcing markets

This paper develops a model to investigate the effects of spatial pricing on ride-sourcing markets. The model is built upon a discrete time geometric matching framework that matches customers with drivers nearby. We demonstrate that a customer may be matched to a distant vehicle when demand surges, yielding an inefficient supply state. We further investigate market equilibrium under spatial pricing assuming a revenue maximizing platform, and find that the platform may resort to relatively higher price to avoid the inefficient supply state if spatial price differentiation is not allowed. Although spatial pricing facilitates market clearing, the platform may still set price more than the efficient level, which compromises the public interest. We then propose a commission rate cap regulation that reaps the flexibility of spatial pricing and can achieve the second best under some homogeneity assumptions.     

A simulation‐based reliability assessment approach for congested transit network

This paper is an attempt to develop a generic simulation‐based approach to assess transit service reliability, taking into account interaction between network performance and passengers' route choice behaviour. Three types of reliability, say, system wide travel time reliability, schedule reliability and direct boarding waiting‐time reliability are defined from perspectives of the community or transit administration, the operator and passengers. A Monte Carlo simulation approach with a stochastic user equilibrium transit assignment model embedded is proposed to quantify these three reliability measures of transit service. A simple transit network with a bus rapid transit (BRT) corridor is analysed as a case study where the impacts of BRT components on transit service reliability are evaluated preliminarily.     

The revenue and environmental benefits of new off-peak commuter rail service: the case of the Pascack Valley line in New Jersey

Although researchers have long argued in favor of off-peak transit service, studies that have empirically estimated its benefits regarding revenue generation, trip diversions, and greenhouse gas (GHG) emission are rare. This study provides important evidence about the benefits of off-peak commuter rail service by focusing on the Pascack Valley line in New Jersey, where off-peak service was introduced in October 2007. The research involved two focus groups and an onboard survey of passengers. Benefits were estimated regarding additional revenue generation and reduction in vehicle miles traveled (VMT) and GHG emission. The research shows that the new off-peak service potentially reduced VMT by more than 12 million annually due to diversions from other modes. Although diversions from other modes resulted in a substantial reduction in GHG emissions, due to the additional diesel fuel used by the new trains, the net GHG savings were in the range of 28–49 %. The research further shows that both peak period and off-peak riders benefited from the new off-peak service. Evidence is found about an increase in new transit riders and a modest increase peak period usage because of the off-peak service.     

Crowding in public transport systems: Effects on users,operation and implications for the estimation of demand

The effects of high passenger density at bus stops, at rail stations, inside buses and trains are diverse. This paper examines the multiple dimensions of passenger crowding related to public transport demand, supply and operations, including effects on operating speed, waiting time, travel time reliability, passengers’ wellbeing, valuation of waiting and in-vehicle time savings, route and bus choice, and optimal levels of frequency, vehicle size and fare. Secondly, crowding externalities are estimated for rail and bus services in Sydney, in order to show the impact of crowding on the estimated value of in-vehicle time savings and demand prediction. Using Multinomial Logit (MNL) and Error Components (EC) models, we show that alternative assumptions concerning the threshold load factor that triggers a crowding externality effect do have an influence on the value of travel time (VTTS) for low occupancy levels (all passengers sitting); however, for high occupancy levels, alternative crowding models estimate similar VTTS. Importantly, if demand for a public transport service is estimated without explicit consideration of crowding as a source of disutility for passengers, demand will be overestimated if the service is designed to have a number of standees beyond a threshold, as analytically shown using a MNL choice model. More research is needed to explore if these findings hold with more complex choice models and in other contexts.     

Dynamic modeling and control of taxi services in large-scale urban networks: A macroscopic approach

Taxis are increasingly becoming a prominent mobility mode in many major cities due to their accessibility and convenience. The growing number of taxi trips and the increasing contribution of taxis to traffic congestion are cause for concern when vacant taxis are not distributed optimally within the city and are unable to find unserved passengers effectively. A way of improving taxi operations is to deploy a taxi dispatch system that matches the vacant taxis and waiting passengers while considering the search friction dynamics. This paper presents a network-scale taxi dispatch model that takes into account the interrelated impact of normal traffic flows and taxi dynamics while optimizing for an effective dispatching system. The proposed model builds on the concept of the macroscopic fundamental diagram (MFD) to represent the dynamic evolution of traffic conditions. The model considers multiple taxi service firms operating in a heterogeneously congested city, where the city is assumed to be partitioned into multiple regions each represented with a well-defined MFD. A model predictive control approach is devised to control the taxi dispatch system. The results show that lack of the taxi dispatching system leads to severe accumulation of unserved taxi passengers and vacant taxis in different regions whereas the dispatch system improves the taxi service performance and reduces traffic congestion by regulating the network towards the undersaturated condition. The proposed framework demonstrates sound potential management schemes for emerging mobility solutions such as fleet of automated vehicles and demand-responsive transit services.     

Reducing the cost of peak hour transit service through contracting out service

Transit service contracting has responded to fiscal and financial woes of public transit agencies as the most uniquely attractive cost‐saving strategy at present. Most transit service contracting, however, has been in the traditional provision of entire fixed route bus service or commuter express bus service, and exclusive demand responsive service for the general public or for special disadvantaged population groups such as the elderly and/or the handicapped. This paper presents a new module in transit service contracting whereby the public and private operators jointly provide the peak service on the same route and at the same time. While the public agency provides the base demand of the service, the private provider provides the excess demand, both following the same schedules and similar service arrangements. In this paper, proposed service arrangements, costing and contracting procedures are discussed. It is also reported that substantial cost savings ranging from 32 to 57% with an average savings of 48% can be achieved if the excess peak hour bus transit service on highly peaked routes in public transit agencies is contracted to competing private operator(s).     

Intermodal Transit System Coordination

In urban areas where transit demand is widely spread, passengers may be served by an intermodal transit system, consisting of a rail transit line (or a bus rapid transit route) and a number of feeder routes connecting at different transfer stations. In such a system, passengers may need one or more transfers to complete their journey. Therefore, scheduling vehicles operating in the system with special attention to reduce transfer time can contribute significantly to service quality improvements. Schedule synchronization may significantly reduce transfer delays at transfer stations where various routes interconnect. Since vehicle arrivals are stochastic, slack time allowances in vehicle schedules may be desirable to reduce the probability of missed connections. An objective total cost function, including supplier and user costs, is formulated for optimizing the coordination of a general intermodal transit network. A four-stage procedure is developed for determining the optimal coordination status among routes at every transfer station. Considering stochastic feeder vehicle arrivals at transfer stations, the slack times of coordinated routes are optimized, by balancing the savings from transfer delays and additional cost from slack delays and operating costs. The model thus developed is used to optimize the coordination of an intermodal transit network, while the impact of a range of factors on coordination (e.g., demand, standard deviation of vehicle arrival times, etc) is examined.     

Demand responsive transit systems with time-dependent demand: User equilibrium,system optimum,and management strategy

The operating cost of a demand responsive transit (DRT) system strictly depends on the quality of service that it offers to its users. An operating agency seeks to minimize operating costs while maintaining the quality of service while users experience costs associated with scheduling, waiting, and traveling within the system. In this paper, an analytical model is employed to approximate the agency's operating cost for running a DRT system with dynamic demand and the total generalized cost that users experience as a result of the operating decisions. The approach makes use of Vickrey's (1969) congestion theory to model the dynamics of the DRT system in the equilibrium condition and approximate the generalized cost for users when the operating capacity is inadequate to serve the time-dependent demand over the peak period without excess delay. The efficiency of the DRT system can be improved by optimizing one of three parameters that define the agency's operating decision: (1) the operating capacity of the system, (2) the number of passengers that have requested a pick-up and are awaiting service, and (3) the distribution of requested times for service from the DRT system. A schedule management strategy and dynamic pricing strategies are presented that can be implemented to manage demand and reduce the total cost of the DRT system by keeping the number of waiting requests optimized over the peak period. In the end, proposed optimization strategies are compared using a numerical example.     

An analytic investigation of optimal bus size

The use of smaller buses offers passengers a better service frequency for a given service capacity, but costs more to operate per seat provided. Within this trade-off there is an optimal bus size which maximises social benefit. A mathematical model is described which can be solved analytically to provide an explicit relationship between optimal bus size and factors such as operating cost, level of demand, and demand elasticities. The model includes: passenger demand varying with the generalised cost of travel according to a constant elasticity; the effect of changes in bus occupancy on average waiting times and on operating speed; the financial constraint that farebox revenue must equal operating cost less subsidy; an allowance for external benefits associated with generated demand, and for the effect of the flow of buses on traffic congestion; and an operating cost increasing linearly with bus size. The optimal size varies with the square root of demand, and with the unit cost to the power of 0.1 to 0.2. It also increases slowly with the proportion of cost covered by subsidy. For typical urban operating conditions in the United Kingdom the optimal size for a monopoly service lies between 55 and 65 seats assuming the observed relationship between cost and size; it is possible that changes in working practices could make smaller buses relatively cheaper to operate, so reducing the optimal size, but it seems unlikely to fall below 40 seats.     

Assessing the financial value of real-time energy trading services for privately owned non-commercial electric vehicles

Real-time energy trading services for privately owned non-commercial electric vehicles are characterized by an e-vehicle provider, by a provider of energy trading skills and technology, and by the fact that the latter manages (dis-)charging of the e-vehicle of the former with real-time energy prices. We conduct a simulation study to present a comprehensive assessment of the financial value of such services. Such an assessment is required in order to provide policymakers with guidance on if and how real-time trading services can serve as a tool to incentivize e-vehicle ownership. We propose a fully reproducible simulation model of the value creation process of real-time trading services, and use the model to assess services with a range of e-vehicle provider characteristics as well as with a range of technology setups. Our empirical results show that all considered real-time trading services are able to create significant energy cost savings, and that overall cost savings strongly depend on technology characteristics, surcharge rate, as well as on the e-vehicle provider's commute, household size, and office hours. We show that services including solar energy generation have the largest economic potential but do not necessarily maximize renewable energy deployment with residential households. We conclude with recommendations for policymakers on how to tap the full economic potential of real-time trading services for stimulating the adoption of e-vehicles.     

不同主导权结构下的双渠道供应链定价策略及协调机制研究

基于制造商开辟线上直销渠道与线下零售渠道构成双渠道供应链的背景下,结合实际的服务影响因素,对不同主导权结构下双渠道供应链各成员的定价策略和协调机制进行研究。分别构建制造商主导、零售商主导、垂直均衡三种分散决策下的两阶段Stackelberg博弈模型,研究发现相较于集中决策,分散决策下供应链成员在价格、需求、利润上均有所损失。为缓解渠道之间的矛盾与冲突,引入一种双向收益共享契约用于协调供应链。研究表明,在一定的收益共享范围内,双向收益共享契约可以完美协调供应链;对于主导企业而言,主导权越向自身集中,所需共享的收益比例也越小;随着零售商服务水平的增大,制造商的利润不断增大,零售商的利润不断减小,供应链整体利润呈先增后减趋势。     

A reliability-based assignment method for railway networks with heterogeneous passengers

Travel reliability can play an important role in shaping travelers’ route choice behavior. This paper develops a railway passenger assignment method to capture the reliability-based route choices, where the trains can have stochastic delays. The overall travel reliability has two components: the travel time reliability (of trains) and the associated transfer reliability (of connections). In this context, mean-and-variance-based effective travel cost is adopted to model passengers’ evaluation of different travel options in the railway network. Moreover, passengers are heterogeneous as they may evaluate the effective travel cost differently, and they may have different requirements for the successful transfer probability (if transfers are involved in the trip). The determination of travel time reliability (of trains) is based on the travel delay distribution, and the successful transfer probability is calculated based on the delay probabilities of two trains in the transfer process. An algorithm has been designed for solving the model, and numerical examples are presented to test and illustrate the model.     

Evaluation of an existing bus network using a transit network optimisation model: a case study of the Hiroshima City Bus network

This study evaluates an existing bus network from the perspectives of passengers, operators, and overall system efficiency using the output of a previously developed transportation network optimisation model. This model is formulated as a bi-level optimisation problem with a transit assignment model as the lower problem. The upper problem is also formulated as bi-level optimisation problem to minimise costs for both passengers and operators, making it possible to evaluate the effects of reducing operator cost against passenger cost. A case study based on demand data for Hiroshima City confirms that the current bus network is close to the Pareto front, if the total costs to both passengers and operators are adopted as objective functions. However, the sensitivity analysis with regard to the OD pattern fluctuation indicates that passenger and operator costs in the current network are not always close to the Pareto front. Finally, the results suggests that, regardless of OD pattern fluctuation, reducing operator costs will increase passenger cost and increase inequity in service levels among passengers.     

Evaluating the added-value of online bus arrival prediction schemes

Online predictions of bus arrival times have the potential to reduce the uncertainty associated with bus operations. By better anticipating future conditions, online predictions can reduce perceived and actual passenger travel times as well as facilitate more proactive decision making by service providers. Even though considerable research efforts were devoted to the development of computationally expensive bus arrival prediction schemes, real-world real-time information (RTI) systems are typically based on very simple prediction rules. This paper narrows down the gap between the state-of-the-art and the state-of-the-practice in generating RTI for public transport systems by evaluating the added-value of schemes that integrate instantaneous data and dwell time predictions. The evaluation considers static information and a commonly deployed scheme as a benchmark. The RTI generation algorithms were applied and analyzed for a trunk bus network in Stockholm, Sweden. The schemes are assessed and compared based on their accuracy, reliability, robustness and potential waiting time savings. The impact of RTI on passengers waiting times are compared with those attained by service frequency and regularity improvements. A method which incorporates information on downstream travel conditions outperforms the commonly deployed scheme, leading to a 25% reduction in the mean absolute error. Furthermore, the incorporation of instantaneous travel times improves the prediction accuracy and reliability, and contributes to more robust predictions. The potential waiting time gains associated with the prediction scheme are equivalent to the gains expected when introducing a 60% increase in service frequency, and are not attainable by service regularity improvements.     

Improved customs inspection at a small international airport: Case study: Colombo

The present procedures for processing arriving passengers at the Colombo International Airport cause inordinte waiting times. An alternate plan, which is based on state of the art customs procedures, and which can reduce waiting times significantly while maintaining a high level of enforcement, is proposed. The present and proposed procedures are analyzed and compared with respect to passenger waiting times, using deterministic queueing theory. An optimal inspection rate of passengers by the customs service is proposed taking into account the fraction of inspected passengers, the waiting time of passengers and the cost of customs processing.     

Evaluation of transit operations: data applications of Tri-Met's automated Bus Dispatching System

In this paper, archived Automatic Vehicle Location and Automatic Passenger Counter data are used to evaluate actual bus running time variation in relation to scheduled service for Tri-Met, the transit provider for the Portland, Oregon metropolitan area. Given observed variation in running times, scheduled recovery times are found to be generally (though not universally) excessive. This results in an under-investment of resources in revenue service relative to non-revenue service. Analysis of trip level data reveals that bus operators are an important source of running time variation after controlling for such factors as route design, time of day and direction of service, and passenger activity.     

Economic analysis of ride-sourcing markets

Ride-sourcing refers to an emerging urban mobility service that private car owners drive their own vehicles to provide for-hire rides. This paper analyzes the ride-sourcing market using an aggregate model where the matchings between customers and drivers are captured by an exogenous matching function. It is found that without any regulatory intervention a monopoly ride-sourcing platform will maximize the joint profit with its drivers. On the other hand, the first-best solution is not sustainable when the matching function exhibits increasing returns to scale and the cost function of the platform is subject to economies of scale. Regardless of the examined market scenarios, the average waiting time of customers is proportional to the average searching time of drivers. We establish conditions for regulators to solely regulate the commission charged by the platform to guarantee the second-best. We further investigate the competition of ride-sourcing platforms and find that competition does not necessarily lower the price level or improve social welfare. In the latter case, regulators may rather encourage the merger of the platforms and regulate them directly as a monopolist.     

Index numbers for monitoring transit service quality

The measurement of transit service quality is very important for guaranteeing a transport supply characterized by satisfactory service levels for the passengers. Even more important is the monitoring of the levels of service quality over time, which can be very useful to determine if the goals established by the transport planners are being met or exceeded. The status and evolution of transit service quality can be monitored through periodic and regular updating of the opinions expressed by the passengers about the service during the well-known Customer Satisfaction Surveys, allowing the effect of policies to be evaluated and specific interventions to be introduced. In this work, just the issue of monitoring service quality based on users’ opinions is approached, and the index numbers usually applied in the economic and industrial field are proposed for this purpose. Index numbers permit to study the fluctuations or variations of a variable or more variables over time, providing a powerful measurement for making comparisons and predictions of the analyzed concept. The index numbers were calculated on the basis of data collected from Customer Satisfaction Surveys addressed to the passengers of the metropolitan public service of Granada (Spain). The analyzed time period has been established from 2007 to 2013. Interesting results derive from the calculation of the index numbers. Since both perceptions and importance rates are considered in this methodology, the results can inform, not only on the satisfaction tendencies but also on the trend on customers’ priorities, which is actually the expected quality. Therefore, policies could more efficiently be designed to adjust the service to the users’ real needs.     

A theoretical travel-time model for flexible-route buses

A theoretical model for estimating the expectation and variance of buses' running times under a flexibly-routed mode of service is proposed. The model is based on a probabilistic concept that adequately accommodates the usual randomness in the number and location of passengers served during successive vehicle trips. A few simplifications are embodied in the model but it can serve as a basis for a more refined model such as a computer simulation model that can be used in designing real bus systems.The physical setting assumed in the model is a rectangular grid road network where all houses face the side streets as in some suburban regions. Because it oversimplifies real-life situations, this assumption would need to be relaxed to make the model applicable to more general cases.Both the partially flexible-route service where some passengers are captive to fixed-route service and others are served at their doorsteps, and the fully flexible-route service where all passengers are served at their doorsteps, are studied. In each case, a very simple routing convention that can be conveniently executed by the bus drivers is assumed. The proposed travel time model confirms the intuitively correct phenomenon that when the concentration of passenger trip-ends is very high, the vehicle-route degenerates into a fixed-route in which the buses visit all possible loading points within the service area.