Improving equity of urban transit systems with the adoption of origin-destination based taxi fares

In this paper an original approach for setting taxi fares is proposed. The approach is based on origin-destination fares and aims to increase the equity of transportation supply in an urban area: routes in certain urban areas can be very well served while others may be served poorly or not at all. Yet most citizens contribute indirectly to transit systems that are often subsidized to a considerable extent by public money. The proposed method seeks to balance this asymmetry, reducing taxi fares on origin-destination pairs that are poorly served by other transportation modes. An optimisation problem based on this principle is formulated and solved. The proposed approach is tested on a small test network and on a real-scale network. Numerical results show that the approach is applicable and useful to enhance equity in transit services.