Modelling Optimal Policies of Demand Responsive Transport and Interrelationships between Occupancy Rate and Costs

TL;DR

This paper develops a comprehensive model for demand responsive transportation, optimizing policies by considering external travel costs, occupancy rates, and route-specific pricing to improve welfare and operational efficiency.

Contribution

It introduces a novel model that endogenizes occupancy rates and optimizes differentiated route pricing, extending previous aggregate models to network-level analysis.

Findings

Occupancy rate depends on demand and capacity levels.

Optimal differentiated pricing varies across routes.

Model captures external travel time costs and welfare implications.

Abstract

This paper presents a model addressing welfare optimal policies of demand responsive transportation service, where passengers cause external travel time costs for other passengers due to the route changes. Optimal pricing and trip production policies are modelled both on the aggregate level and on the network level. The aggregate model is an extension from Jokinen (2016) with flat pricing model, but occupancy rate is now modelled as an endogenous variable depending on demand and capacity levels. The network model enables to describe differences between routes from the viewpoint of occupancy rate and efficient trip combining. Moreover, the model defines the optimal differentiated pricing for routes.