[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v143y2021icp1-22.html
   My bibliography  Save this article

Modeling and analyzing a taxi market with a monopsony taxi owner and multiple rentee-drivers

Author

Listed:
  • Li, Baicheng
  • Szeto, W.Y.
Abstract
Taxis offer round-the-clock, comfortable, and direct transportation services. In many cities, a large number (or all) of taxi drivers are rentee-drivers who rent taxis from taxi owners. Therefore, interaction exists between taxi owners and rentee-drivers. To regulate taxi markets effectively, it is necessary to model such interaction and investigate how different regulatory regimes affect stakeholders in taxi markets (e.g., taxi owners, rentee-drivers, and customers) and system performance (social welfare) in the presence of such an interaction. This study extends the classical aggregate taxi model to describe the supply of rentee-drivers and their interaction with a monopsony taxi owner. A general supply function is proposed to describe the supply of rentee-drivers in the market. A profit-maximization model and a social welfare maximization model are proposed to describe the decision-making process of the monopsonist and the government, respectively. Analytical and numerical studies are given to illustrate the properties of the proposed models and investigate the effects of fare adjustments and taxi rent/fleet size regulations on the monopsonist, rentee-drivers, customers, and system performance, thereby providing insights into taxi market regulations.

Suggested Citation

  • Li, Baicheng & Szeto, W.Y., 2021. "Modeling and analyzing a taxi market with a monopsony taxi owner and multiple rentee-drivers," Transportation Research Part B: Methodological, Elsevier, vol. 143(C), pages 1-22.
    • Handle: RePEc:eee:transb:v:143:y:2021:i:c:p:1-22
    DOI: 10.1016/j.trb.2020.10.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261520304203
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.trb.2020.10.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gérard P. Cachon & Kaitlin M. Daniels & Ruben Lobel, 2017. "The Role of Surge Pricing on a Service Platform with Self-Scheduling Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 19(3), pages 368-384, July.
    2. De Vany, Arthur S, 1975. "Capacity Utilization under Alternative Regulatory Restraints: An Analysis of Taxi Markets," Journal of Political Economy, University of Chicago Press, vol. 83(1), pages 83-94, February.
    3. John R. Schroeter, 1983. "A Model of Taxi Service under Fare Structure and Fleet Size Regulation," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 81-96, Spring.
    4. Qian, Xinwu & Ukkusuri, Satish V., 2017. "Taxi market equilibrium with third-party hailing service," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 43-63.
    5. Yang, Hai & Yang, Teng, 2011. "Equilibrium properties of taxi markets with search frictions," Transportation Research Part B: Methodological, Elsevier, vol. 45(4), pages 696-713, May.
    6. Daniel Flores-Guri, 2003. "An Economic Analysis of Regulated Taxicab Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(3_4), pages 255-266, December.
    7. Yang, Hai & Leung, Cowina W.Y. & Wong, S.C. & Bell, Michael G.H., 2010. "Equilibria of bilateral taxi-customer searching and meeting on networks," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 1067-1083, September.
    8. Long, Jiancheng & Szeto, W.Y. & Du, Jie & Wong, R.C.P., 2017. "A dynamic taxi traffic assignment model: A two-level continuum transportation system approach," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 222-254.
    9. Yang, Hai & Wong, S. C. & Wong, K. I., 2002. "Demand-supply equilibrium of taxi services in a network under competition and regulation," Transportation Research Part B: Methodological, Elsevier, vol. 36(9), pages 799-819, November.
    10. Henry S. Farber, 2015. "Why you Can’t Find a Taxi in the Rain and Other Labor Supply Lessons from Cab Drivers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1975-2026.
    11. Wong, K. I. & Wong, S. C. & Yang, Hai, 2001. "Modeling urban taxi services in congested road networks with elastic demand," Transportation Research Part B: Methodological, Elsevier, vol. 35(9), pages 819-842, November.
    12. Ke, Jintao & Cen, Xuekai & Yang, Hai & Chen, Xiqun & Ye, Jieping, 2019. "Modelling drivers’ working and recharging schedules in a ride-sourcing market with electric vehicles and gasoline vehicles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 160-180.
    13. Cetin, Tamer & Deakin, Elizabeth, 2019. "Regulation of taxis and the rise of ridesharing," Transport Policy, Elsevier, vol. 76(C), pages 149-158.
    14. Li, Baicheng & Szeto, W.Y., 2019. "Taxi service area design: Formulation and analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 308-333.
    15. Beesley, Michael E, 1973. "Regulation of Taxis," Economic Journal, Royal Economic Society, vol. 83(329), pages 150-172, March.
    16. Arnott, Richard, 1996. "Taxi Travel Should Be Subsidized," Journal of Urban Economics, Elsevier, vol. 40(3), pages 316-333, November.
    17. Hai Yang & Min Ye & Wilson Hon-Chung Tang & Sze Chun Wong, 2005. "A Multiperiod Dynamic Model of Taxi Services with Endogenous Service Intensity," Operations Research, INFORMS, vol. 53(3), pages 501-515, June.
    18. Jiaru Bai & Kut C. So & Christopher S. Tang & Xiqun (Michael) Chen & Hai Wang, 2019. "Coordinating Supply and Demand on an On-Demand Service Platform with Impatient Customers," Manufacturing & Service Operations Management, INFORMS, vol. 21(3), pages 556-570, July.
    19. K. I. Wong & S.C. Wong & J. H. Wu & Hai Yang & William H. K. Lam, 2004. "A combined distribution, hierarchical mode choice, and assignment network model with multiple user and mode classes," Chapters, in: Der-Horng Lee (ed.), Urban and Regional Transportation Modeling, chapter 2, Edward Elgar Publishing.
    20. Yang, Hai & Wong, S. C., 1998. "A network model of urban taxi services," Transportation Research Part B: Methodological, Elsevier, vol. 32(4), pages 235-246, May.
    21. Cairns, Robert D. & Liston-Heyes, Catherine, 1996. "Competition and regulation in the taxi industry," Journal of Public Economics, Elsevier, vol. 59(1), pages 1-15, January.
    22. Yang, Hai & Ye, Min & Tang, Wilson H. & Wong, S.C., 2005. "Regulating taxi services in the presence of congestion externality," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(1), pages 17-40, January.
    23. Wong, K.I. & Wong, S.C. & Yang, Hai & Wu, J.H., 2008. "Modeling urban taxi services with multiple user classes and vehicle modes," Transportation Research Part B: Methodological, Elsevier, vol. 42(10), pages 985-1007, December.
    24. Wang, Xiaolei & He, Fang & Yang, Hai & Oliver Gao, H., 2016. "Pricing strategies for a taxi-hailing platform," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 212-231.
    25. Yang, Hai & Fung, C.S. & Wong, K.I. & Wong, S.C., 2010. "Nonlinear pricing of taxi services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(5), pages 337-348, June.
    26. Henry S. Farber, 2005. "Is Tomorrow Another Day? The Labor Supply of New York City Cabdrivers," Journal of Political Economy, University of Chicago Press, vol. 113(1), pages 46-82, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zipeng Zhang & Ning Zhang, 2021. "Re-Recognition of Ride-Sourcing Service: From the Perspective of Operational Efficiency and Social Welfare," Sustainability, MDPI, vol. 13(15), pages 1-14, July.
    2. Rathore, Bhawana & Sengupta, Pooja & Biswas, Baidyanath & Kumar, Ajay, 2024. "Predicting the price of taxicabs using Artificial Intelligence: A hybrid approach based on clustering and ordinal regression models," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 185(C).
    3. Cai, Zeen & Mo, Dong & Geng, Maosi & Tang, Wei & Chen, Xiqun Michael, 2023. "Integrating ride-sourcing with electric vehicle charging under mixed fleets and differentiated services," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 169(C).
    4. Vizuete-Luciano, Emili & Guillén-Pujadas, Miguel & Alaminos, David & Merigó-Lindahl, José María, 2023. "Taxi and urban mobility studies: A bibliometric analysis," Transport Policy, Elsevier, vol. 133(C), pages 144-155.
    5. Kim, Youngsoo, 2022. "Taxi driver’s learning curves: An empirical analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 166(C), pages 1-13.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Baicheng & Szeto, W.Y., 2019. "Taxi service area design: Formulation and analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 308-333.
    2. Yang, Hai & Yang, Teng, 2011. "Equilibrium properties of taxi markets with search frictions," Transportation Research Part B: Methodological, Elsevier, vol. 45(4), pages 696-713, May.
    3. Ting Wang & Yong Zhang & Meiye Li & Lei Liu, 2019. "How Do Passengers with Different Using Frequencies Choose between Traditional Taxi Service and Online Car-Hailing Service? A Case Study of Nanjing, China," Sustainability, MDPI, vol. 11(23), pages 1-18, November.
    4. Nourinejad, Mehdi & Ramezani, Mohsen, 2020. "Ride-Sourcing modeling and pricing in non-equilibrium two-sided markets," Transportation Research Part B: Methodological, Elsevier, vol. 132(C), pages 340-357.
    5. Chen, Xiqun (Michael) & Zheng, Hongyu & Ke, Jintao & Yang, Hai, 2020. "Dynamic optimization strategies for on-demand ride services platform: Surge pricing, commission rate, and incentives," Transportation Research Part B: Methodological, Elsevier, vol. 138(C), pages 23-45.
    6. Szeto, W.Y. & Wong, R.C.P. & Yang, W.H., 2019. "Guiding vacant taxi drivers to demand locations by taxi-calling signals: A sequential binary logistic regression modeling approach and policy implications," Transport Policy, Elsevier, vol. 76(C), pages 100-110.
    7. Tian, Lijun & Jiang, Xiaolan & Wu, Wenxiang & Huang, Haijun, 2024. "Becoming a freelancer or contractor? Drivers’ contractual mode and schedule decisions in a dual sourcing market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 185(C).
    8. Wong, K.I. & Wong, S.C. & Yang, Hai & Wu, J.H., 2008. "Modeling urban taxi services with multiple user classes and vehicle modes," Transportation Research Part B: Methodological, Elsevier, vol. 42(10), pages 985-1007, December.
    9. Yang, Hai & Leung, Cowina W.Y. & Wong, S.C. & Bell, Michael G.H., 2010. "Equilibria of bilateral taxi-customer searching and meeting on networks," Transportation Research Part B: Methodological, Elsevier, vol. 44(8-9), pages 1067-1083, September.
    10. Wong, R.C.P. & Szeto, W.Y., 2022. "The effects of peak hour and congested area taxi surcharges on customers’ travel decisions: Empirical evidence and policy implications," Transport Policy, Elsevier, vol. 121(C), pages 78-89.
    11. Yang, Jie & Zhao, Daozhi & Wang, Zeyu & Xu, Chunqiu, 2022. "Impact of regulation on on-demand ride-sharing service: Profit-based target vs demand-based target," Research in Transportation Economics, Elsevier, vol. 92(C).
    12. Fabien Leurent, 2019. "Microeconomics of a taxi service in a ring-shaped city," Working Papers hal-02047269, HAL.
    13. Li, Baicheng & Szeto, W.Y. & Luo, Qin, 2021. "A peak-period taxi scheme design problem: Formulation and policy implications," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 146(C).
    14. Long, Jiancheng & Szeto, W.Y. & Du, Jie & Wong, R.C.P., 2017. "A dynamic taxi traffic assignment model: A two-level continuum transportation system approach," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 222-254.
    15. Zhang, Kenan & Nie, Yu (Marco), 2021. "To pool or not to pool: Equilibrium, pricing and regulation," Transportation Research Part B: Methodological, Elsevier, vol. 151(C), pages 59-90.
    16. Thorsten Heilker & Gernot Sieg, 2017. "A duopoly of transportation network companies and traditional radio-taxi dispatch service agencies," Working Papers 24, Institute of Transport Economics, University of Muenster.
    17. Zha, Liteng & Yin, Yafeng & Du, Yuchuan, 2018. "Surge pricing and labor supply in the ride-sourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 117(PB), pages 708-722.
    18. Ke, Jintao & Li, Xinwei & Yang, Hai & Yin, Yafeng, 2021. "Pareto-efficient solutions and regulations of congested ride-sourcing markets with heterogeneous demand and supply," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    19. Zhang, Yufeng & Khani, Alireza, 2021. "Integrating transit systems with ride-sourcing services: A study on the system users’ stochastic equilibrium problem," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 95-123.
    20. Wong, R.C.P. & Szeto, W.Y., 2018. "An alternative methodology for evaluating the service quality of urban taxis," Transport Policy, Elsevier, vol. 69(C), pages 132-140.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transb:v:143:y:2021:i:c:p:1-22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/548/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.