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Paratransit Services for Efficiency: Examining the Potential for Taxis to be Included in Subsidized Market

Yuki Hashimoto and Kazutomo Komae

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This study examines the inefficiency of subsidized paratransit transportation services for the elderly. In the open-entry market, there is a possibility of an oversupply of vehicles and a deadweight loss. Our empirical results reveal that expanding paratransit vehicles reduced taxi usage with fewer public subsidies by 2.7%. To improve the efficiency of the paratransit transportation market, we propose using unoccupied taxis and regionally integrating paratransit services with smart dispatching algorithms. If taxis could provide the complementary services as dedicated paratransit vehicles, it is estimated that the taxi driver’s annual income would increase by 4.2%.

Pages: 43 pages
Date: 2021-08
New Economics Papers: this item is included in nep-age, nep-isf, nep-tre and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:21074

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