Study on urban taxi pricing based on the different service modes

With the popularization of taxis equipped with GPS/GIS, great importance is attached to the integrated service modes including cruising and dispatching service modes increasingly. This paper analyzed characteristic of the trip mode choice and established a bi-level mathematical programming model based on the integrated service modes to identify the optimal price of taxis in market. The upper-level model maximized the social welfare in taxi market. The lower-level model described not only how occupied taxis and vacant taxis cruised on network to provide services and search for customers, but also the dispatching service. The lower-level model also presented the relationship between customer and taxi waiting time by using a taxi-customer meeting function. In a supply-demand equilibrium state, a number of performance indices could be obtained, such as the optimal price, average customer waiting time and average taxi waiting time and so on. According to properties of the bi-level model, an iterative search algorithm based on Hooke-Jeeves method was then designed. Finally, a numerical example was adopted to demonstrate the effect of this model and the principal operational characteristics of taxi market.