Analysis of Metered Taxi Fares

Abstract

This paper examines the rationale behind the pricing mechanism of conventional metered taxi fares and presents an analytical framework for combining the total distance traveled and the time elapsed on the basis of realistic approximations. This analytical framework suggests that the metered taxi fare calculation is equivalent to a linear combination of total distance traveled and total time elapsed with suitable weighting factors assigned to distance and time. The weights for distance and time are based on relatively simple parameters, only one of which, the average running speed, is not under the direct control of the taxi operator.