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

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  • HASHIMOTO Yuki
  • KOMAE Kazutomo

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%.

Suggested Citation

  • HASHIMOTO Yuki & KOMAE Kazutomo, 2021. "Paratransit Services for Efficiency: Examining the Potential for Taxis to be Included in Subsidized Market," Discussion papers 21074, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:21074
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