Operational subsidy optimization in urban rail transit under the break-even mode: Considering two fare regimes

Abstract

This paper discusses the operational subsidy issue of urban rail transit (URT) operators. We first analyse the passenger service activities and operator profit in train operation. The operating costs and income are fully considered, combining the train operation plan and passenger elastic demand. The break-even subsidy model is formulated, which account for the effects of two fare regimes (flat and distance-based fare regimes), to determine the optimal fare for passenger and train operation headway for operators, as well as an operational subsidy to the sustainable development of urban rail transit system. The properties of the proposed model are discussed, then a solution algorithm is presented to find the results based on the first-order optimality conditions. Finally, a numerical example based on the actual data in Changsha city metro line 2 to show the effects of two fare regimes and train operating headway on calculating operational subsidies. The major results consist of solutions for optimal operating policies, which are dependent upon train operation plan, passenger demand, and fare regimes.