An economic analysis of integrating bike sharing service with metro systems

Abstract

• Examine cases where the bike sharing and metro operators work either independently or jointly. • Examine user travel choices against the bike and metro operation decisions given total demand. • Bike sharing helps reduce total social cost even if the operator maximizes its profit. • A more attractive metro service can help bike sharing to be more profitable. This paper develops an analytical bi-level model to examine the strategic interaction and potential integration between bike sharing operation and metro system operation. In the bi-level problem with a given total travel demand, the lower-level model quantifies users’ equilibrium travel choices and the upper-level model optimizes the operation decisions of the bike sharing operator and metro system operator. We examine different operation regimes, where the bike sharing operator and metro operator may work either independently or jointly. We also conduct numerical analysis in the context of Sydney. The analytical and numerical results show that bike sharing can help reduce total social cost even if the operator maximizes its profit. A more attractive metro service may also help the bike sharing operator to increase its profit. Coordinated operation of bike sharing and metro system can help further reduce total social cost while the bike sharing operator can improve its profit.