Paratransit services and efficiency: The potential of utilizing idle taxis in a strained welfare market

Yuki Hashimoto

Research in Transportation Economics, 2024, vol. 108, issue C

Abstract: With population aging, demand for paratransit services has increased, leading to higher operating subsidies. This study uses Japan as a case study to examine the substitutive relationship between subsidized noncommercial wheelchair-accessible vehicles (WAVs), primarily owned by elderly care facilities, and taxis, highlighting inefficiencies in the open-entry paratransit market. Using nationwide panel data, we find that a 10% increase in WAVs results in a 1.7% decrease in taxi revenue, reducing taxi drivers' income by approximately 5%. This effect is more pronounced in regions with higher aging rates and welfare spending. We suggest utilizing vacant taxis for paratransit services to enhance market efficiency.

Keywords: Paratransit; Taxi; Transportation policy; Elder care policy (search for similar items in EconPapers)
JEL-codes: D61 H53 J18 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.retrec.2024.101489

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