Abstract
The cruising taxi industry has been greatly impacted by the development of the ride-hailing taxi services like the Didi and Uber. The service orders of cruising taxis fell 35% or more. To intervene the conflicts between the cruising and ride-hailing taxis, system dynamics model of cruising taxicab price was proposed by considering the competitive relationships between online ride-hailing and cruising taxis. The proposed model was calibrated and validated by the taxi operational data in Ningbo. Simulation experiments were designed to explore the impact of the cruising taxi price changes on the balance of market supply and demand. Simulations were divided into two scenarios: one was under the different levels of supply and demand at peak and low peak; the other was under the different proportions of ride-hailing taxi. The results indicate that (1) the market supply and demand are close to equilibrium during peak hours when the price increases by ¥0.6 per kilometer. The increased price can reduce the peak demand level effectively and also increase the total earning of cruising taxis; (2) when the service order ratio of cruising taxis to ride-hailing taxis accounts for about 10:4.5 and 10:8, the price increases by ¥0.6 per kilometer and decreases by ¥0.4 per kilometer to achieve the equilibrium of demand and supply, respectively. That is, when the cruising taxis have an advantage over the ride-hailing taxis, the price of cruising taxis should be raised to gain more benefits. Instead, the cruising taxis price should be decreased to improve their competitiveness.
Highlights
As an important part of the city’s comprehensive transportation system and a supplement of urban public transport system, taxicabs provide personalized transport services to the public.[1]
Taken the cruising taxis in Ningbo as an example, simulation experiments were designed to explore the impact of the cruising taxi price changes on the balance of market supply and demand
In order to promote the further reform of the taxi industry in China, a system dynamics model of cruising taxicab price was proposed by considering the competitive relationships between online ride-hailing and cruising taxis
Summary
As an important part of the city’s comprehensive transportation system and a supplement of urban public transport system, taxicabs provide personalized transport services to the public.[1]. Traditional cruising taxicabs, the Ministry of Transportation has issued the regulation on deepening reform and promoting the healthy development of taxi industry in China. The regulation clearly announces that it is necessary to establish a dynamic adjustment mechanism of taxicab price for adjusting equilibrium of supply and demand in taxi industry.[4]. A flexible pricing mechanism is a useful method to keep the taxi vacancy rate under an optimal level.[13] there was little work on the topic of dynamic taxi pricing strategies considering the competition between cruising and the ride-hailing taxis. The system dynamics was applied to establish the dynamic pricing model of the cruising taxis by considering the competitive relationship with online ride-hailing taxis. The prices under the different service order ratios of cruising taxis to ride-hailing taxis were analyzed for gaining the competitive advantages. The results can provide technical support for the sustainable development of the cruising taxi industry
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