Modeling Optimal Fare and Service Provisions for a Crowded Rail Transit Line

Abstract

To relieve worsening traffic congestion and protect the deteriorating environment, many cities in China start to operate rail transit lines. However, the expected modal shift will only occur if the rail transit system offers great advantages over road transport modes. To this end, designing efficient operational arrangement has far-reaching impacts not only on rail transit itself, but also on the overall urban transport system. Focusing on a crowded rail transit line, this paper aims to jointly optimize fare, frequency and number of carriages under advocated management objectives. Factors that enter into this joint optimization include negative externality arising from noise pollution, the adverse effect from in-vehicle crowding and positive externality from road congestion relief. To assess whether the rail transit line in a given corridor is priced efficiently and the service provision is appropriate, detailed numerical calculations are carried out for one representative Chinese city—Suzhou. A synthesis of theoretical and empirical analyses depicts: compared with profit optima, social welfare optima are characterized with lower fares, greater frequency, more number of carriages and higher ridership; the change from the current operational arrangement to social optimum would call for reducing fares, increasing frequency and adopting more carriages.