Private vs. Pooled Transportation: Customer Preference and Congestion Management

Kashish Arora (ka522@cornell.edu), Fanyin Zheng (fanyin.zheng@columbia.edu) and Karan Girotra (girotra@cornell.edu)
Additional contact information
Kashish Arora: Cornell University
Fanyin Zheng: Columbia University
Karan Girotra: Cornell University

A chapter in AI and Analytics for Public Health, 2022, pp 59-74 from Springer

Abstract: Abstract Large cities around the globe are facing an alarming growth in traffic congestion, to which a significant contributor are the private cabs operated by ride-hailing platforms. Pooled transportation options such as shuttle services are cheaper and greener alternatives but are still new to many customers and policy makers. In this work, we build a structural model to study customers’ preferences on prices and service features when choosing between private taxis and a scheduled shuttle service. Using the estimated model, we evaluate the efficacy of congestion surcharge policies in reducing congestion on the road. We find that a 20% congestion surcharge leads to 4% of customers switching from the cab to the shuttle service. We show that providing a 20% discount on shuttle rides achieves one-fourth of this effect. We also compare the efficacy of these policies with policies that reduce inconveniences associated with the shuttle service. We find that a 20% decrease in the walking inconvenience can achieve 35% of the total number of customers substituting from cabs to shuttles achieved as compared to the congestion surcharges. Our findings suggest that, by changing operations levers such as pooled service features, cities can achieve a substantial amount of the benefit from reducing congestion, without sacrificing customer welfare, compared with congestion surcharge policies. Moreover, as the majority of the effect comes from new users of the shuttle service, our finding highlights the importance of incorporating customer preference heterogeneity in designing effective policies to manage congestion.

Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-75166-1_2

Ordering information: This item can be ordered from
http://www.springer.com/9783030751661

DOI: 10.1007/978-3-030-75166-1_2

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).