IDEAS home Printed from https://ideas.repec.org/a/eee/transb/v107y2018icp57-69.html
   My bibliography  Save this article

Pricing for a Last-Mile Transportation System

Author

Listed:
  • Chen, Yiwei
  • Wang, Hai

Abstract

The Last-Mile Problem refers to the provision of travel service from the nearest public transportation node to a home or other destination. Last-Mile Transportation System (LMTS), which has recently emerged, provide on-demand shared transportation. We consider an LMTS with multiple passenger types—adults, senior citizens, children, and students. The LMTS designer determines the price for the passengers, last-mile service vehicle capacity, and service fleet size (number of vehicles) for each last-mile region to maximize the social welfare generated by the LMTS. The level of last-mile service (in terms of passenger waiting time) is approximated by using a batch arrival, batch service, multi-server queueing model. The LMTS designer's optimal decisions and optimal social welfare are obtained by solving a constrained nonlinear optimization problem. Our model is implemented in numerical experiments by using real data from Singapore. We show the optimal annual social welfare gained is large. We also analyze a counterpart LMTS in which the LMTS designer sets an identical price for all passenger types. We find that in the absence of price discounts for special groups of passengers, social welfare undergoes almost no change, but the consumer surplus of passengers in special groups suffers significantly.

Suggested Citation

  • Chen, Yiwei & Wang, Hai, 2018. "Pricing for a Last-Mile Transportation System," Transportation Research Part B: Methodological, Elsevier, vol. 107(C), pages 57-69.
    • Handle: RePEc:eee:transb:v:107:y:2018:i:c:p:57-69
    DOI: 10.1016/j.trb.2017.11.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0191261517301546
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.trb.2017.11.008?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

    for a different version of it.

    References listed on IDEAS

    as
    1. Yang, Hai & Bell, Michael G. H., 1997. "Traffic restraint, road pricing and network equilibrium," Transportation Research Part B: Methodological, Elsevier, vol. 31(4), pages 303-314, August.
    2. Yang, Hai & Meng, Qiang, 2000. "Highway pricing and capacity choice in a road network under a build-operate-transfer scheme," Transportation Research Part A: Policy and Practice, Elsevier, vol. 34(3), pages 207-222, April.
    3. Lou, Yingyan & Yin, Yafeng & Lawphongpanich, Siriphong, 2010. "Robust congestion pricing under boundedly rational user equilibrium," Transportation Research Part B: Methodological, Elsevier, vol. 44(1), pages 15-28, January.
    4. Yang, Hai & Huang, Hai-Jun, 1998. "Principle of marginal-cost pricing: how does it work in a general road network?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 32(1), pages 45-54, January.
    5. Wu, Di & Yin, Yafeng & Lawphongpanich, Siriphong, 2011. "Pareto-improving congestion pricing on multimodal transportation networks," European Journal of Operational Research, Elsevier, vol. 210(3), pages 660-669, May.
    6. 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.
    7. Chung, Byung Do & Yao, Tao & Friesz, Terry L. & Liu, Hongcheng, 2012. "Dynamic congestion pricing with demand uncertainty: A robust optimization approach," Transportation Research Part B: Methodological, Elsevier, vol. 46(10), pages 1504-1518.
    Full references (including those not matched with items on IDEAS)

    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. Chen, Yiwei & Wang, Hai, 2025. "Why are fairness concerns so important? Lessons from a last-mile transportation system," Transportation Research Part A: Policy and Practice, Elsevier, vol. 192(C).
    2. Yang, Hai & Huang, Hai-Jun, 2004. "The multi-class, multi-criteria traffic network equilibrium and systems optimum problem," Transportation Research Part B: Methodological, Elsevier, vol. 38(1), pages 1-15, January.
    3. Yang, Hai & Zhang, Xiaoning & Meng, Qiang, 2004. "Modeling private highways in networks with entry-exit based toll charges," Transportation Research Part B: Methodological, Elsevier, vol. 38(3), pages 191-213, March.
    4. Yang, Hai & Tang, Wilson H. & Man Cheung, Wing & Meng, Qiang, 2002. "Profitability and welfare gain of private toll roads in a network with heterogeneous users," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(6), pages 537-554, July.
    5. Ferrari, Paolo, 2010. "Willingness to spend and road pricing rates," Transport Policy, Elsevier, vol. 17(3), pages 160-172, May.
    6. Hai Yang, 1999. "Evaluating the benefits of a combined route guidance and road pricing system in a traffic network with recurrent congestion," Transportation, Springer, vol. 26(3), pages 299-322, August.
    7. Xin Lin & Chris M. J. Tampère & Stef Proost, 2020. "Optimizing Traffic System Performance with Environmental Constraints: Tolls and/or Additional Delays," Networks and Spatial Economics, Springer, vol. 20(1), pages 137-177, March.
    8. Yang, Hai & Meng, Qiang, 1998. "Departure time, route choice and congestion toll in a queuing network with elastic demand," Transportation Research Part B: Methodological, Elsevier, vol. 32(4), pages 247-260, May.
    9. Beheshtian, Arash & Richard Geddes, R. & Rouhani, Omid M. & Kockelman, Kara M. & Ockenfels, Axel & Cramton, Peter & Do, Wooseok, 2020. "Bringing the efficiency of electricity market mechanisms to multimodal mobility across congested transportation systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 131(C), pages 58-69.
    10. Bao, Yue & Gao, Ziyou & Xu, Meng & Sun, Huijun & Yang, Hai, 2015. "Travel mental budgeting under road toll: An investigation based on user equilibrium," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 1-17.
    11. Fournier, Nicholas, 2021. "Hybrid pedestrian and transit priority zoning policies in an urban street network: Evaluating network traffic flow impacts with analytical approximation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 152(C), pages 254-274.
    12. Hoang-Tung, Nguyen & Viet Hung, Do & Kato, Hironori & Binh, Phan Le, 2021. "Modeling ceiling price for build-operate-transfer road projects in developing countries," Economics of Transportation, Elsevier, vol. 28(C).
    13. Wichiensin, Muanmas & Bell, Michael G.H. & Yang, Hai, 2007. "Impact of congestion charging on the transit market: An inter-modal equilibrium model," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(7), pages 703-713, August.
    14. He, Fang & Yin, Yafeng & Lawphongpanich, Siriphong, 2014. "Network equilibrium models with battery electric vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 67(C), pages 306-319.
    15. Yang, Hai & Meng, Qiang, 2002. "A note on "highway pricing and capacity choice in a road network under a build-operate-transfer scheme"," Transportation Research Part A: Policy and Practice, Elsevier, vol. 36(7), pages 659-663, August.
    16. Ding, Hongxing & Yang, Hai & Xu, Hongli & Li, Ting, 2023. "Status quo-dependent user equilibrium model with adaptive value of time," Transportation Research Part B: Methodological, Elsevier, vol. 170(C), pages 77-90.
    17. Chu, Chih-Peng & Tsai, Jyh-Fa, 2008. "The optimal location and road pricing for an elevated road in a corridor," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(5), pages 842-856, June.
    18. Yildirim, Mehmet Bayram & Hearn, Donald W., 2005. "A first best toll pricing framework for variable demand traffic assignment problems," Transportation Research Part B: Methodological, Elsevier, vol. 39(8), pages 659-678, September.
    19. Zhang, Yiwen & Feng, Zhuo & Zhang, Shuibo, 2018. "The effects of concession period structures on BOT road contracts," Transportation Research Part A: Policy and Practice, Elsevier, vol. 107(C), pages 106-125.
    20. Loukas Dimitriou & Theodore Tsekeris & Antony Stathopoulos, 2009. "Joint pricing and design of urban highways with spatial and user group heterogeneity," Netnomics, Springer, vol. 10(1), pages 141-160, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    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:107:y:2018:i:c:p:57-69. 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.