Optimization of differentiated fares and subsidies for different urban rail transit users

Abstract

Motivated by the lack of models and algorithms that optimize differential fares for different groups, this paper presents a model for the design of a differential fare scheme (DFS) which considers different groups in an urban rail transit (URT) system. Differential fare schemes and subsidies are analyzed while accounting for the heterogeneity between general and special socio-economic groups. In the proposed model, we optimize fares, headway, and subsidies, with the objective of maximizing social welfare, subject to constraints on capacity, subsidies, and fares. A solution method based on a divide-and-conquer algorithm is designed to solve the proposed model, and a numerical study is conducted on a metro line in Guangzhou. The integration of a differential fare scheme and subsidy strategy is introduced to incentivizes special groups with fare discounts and corresponding subsidies. This study indicates that with the proposed differential fares, some latent demand for special groups is released, increasing the total demand by 11.26%. Additionally, the effects of different subsidy policies oriented toward financial feasibility, efficiency, passenger service, and operator viability are explored.