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 search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. 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.
    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. 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.
    6. 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.
    7. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Naihui Wang & Yulong Pei & Hao Fu, 2022. "Public Acceptance of Last-Mile Shuttle Bus Services with Automation and Electrification in Cold-Climate Environments," Sustainability, MDPI, vol. 14(21), pages 1-16, November.
    2. Yang, Hai & Shao, Chaoyi & Wang, Hai & Ye, Jieping, 2020. "Integrated reward scheme and surge pricing in a ridesourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 134(C), pages 126-142.
    3. Mohamed Amr Sultan & Tomaž Kramberger & Mahmoud Barakat & Ahmed Hussein Ali, 2023. "Barriers to Applying Last-Mile Logistics in the Egyptian Market: An Extension of the Technology Acceptance Model," Sustainability, MDPI, vol. 15(17), pages 1-25, August.
    4. Wu, Jiaming & Kulcsár, Balázs & Selpi, & Qu, Xiaobo, 2021. "A modular, adaptive, and autonomous transit system (MAATS): A in-motion transfer strategy and performance evaluation in urban grid transit networks," Transportation Research Part A: Policy and Practice, Elsevier, vol. 151(C), pages 81-98.
    5. Qingyang Xiao & Jee Eun Kang, 2023. "Pricing in emerging mobility services: a comprehensive review," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(6), pages 482-500, December.
    6. Bahrami, Sina & Nourinejad, Mehdi & Yin, Yafeng & Wang, Hai, 2023. "The three-sided market of on-demand delivery," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    7. Tai-Yu Ma & Sylvain Klein, 2020. "Integrated ridesharing services with chance-constrained dynamic pricing and demand learning," Papers 2001.09151, arXiv.org, revised Jun 2020.
    8. Liu, Junrong & Duan, Qihong & Ma, Wen-Xiu, 2020. "The evolution of a clogging sidewalk caused by a dockless bicycle-sharing system: A stochastic particles model," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 177(C), pages 516-526.
    9. Ke, Jintao & Yang, Hai & Li, Xinwei & Wang, Hai & Ye, Jieping, 2020. "Pricing and equilibrium in on-demand ride-pooling markets," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 411-431.
    10. Wang, Hai & Yang, Hai, 2019. "Ridesourcing systems: A framework and review," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 122-155.
    11. Ke, Jintao & Zhu, Zheng & Yang, Hai & He, Qiaochu, 2021. "Equilibrium analyses and operational designs of a coupled market with substitutive and complementary ride-sourcing services to public transits," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    12. Li, Xiaonan & Li, Xiangyong & Wang, Hai & Shi, Junxin & Aneja, Y.P., 2022. "Supply regulation under the exclusion policy in a ride-sourcing market," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 69-94.
    13. Matija Kovačić & Maja Mutavdžija & Krešimir Buntak, 2022. "New Paradigm of Sustainable Urban Mobility: Electric and Autonomous Vehicles—A Review and Bibliometric Analysis," Sustainability, MDPI, vol. 14(15), pages 1-23, August.
    14. Zhu, Zheng & Qin, Xiaoran & Ke, Jintao & Zheng, Zhengfei & Yang, Hai, 2020. "Analysis of multi-modal commute behavior with feeding and competing ridesplitting services," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 713-727.
    15. Pazoki, Mostafa & Samarghandi, Hamed & Behroozi, Mehdi, 2024. "Increasing supply chain resiliency through equilibrium pricing and stipulating transportation quota regulation," Omega, Elsevier, vol. 127(C).
    16. Zhu, Zheng & Xu, Ailing & He, Qiao-Chu & Yang, Hai, 2021. "Competition between the transportation network company and the government with subsidies to public transit riders," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    17. Mo, Dong & Yu, Jingru & Chen, Xiqun Michael, 2020. "Modeling and managing heterogeneous ride-sourcing platforms with government subsidies on electric vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 447-472.
    18. Mostafa Pazoki & Hamed Samarghandi & Mehdi Behroozi, 2023. "Increasing Supply Chain Resiliency Through Equilibrium Pricing and Stipulating Transportation Quota Regulation," Papers 2308.00681, arXiv.org, revised Oct 2023.
    19. Hu, Shichun & Dessouky, Maged M. & Uhan, Nelson A. & Vayanos, Phebe, 2021. "Cost-sharing mechanism design for ride-sharing," Transportation Research Part B: Methodological, Elsevier, vol. 150(C), pages 410-434.
    20. Lv, Chang & Zhang, Chaoyong & Lian, Kunlei & Ren, Yaping & Meng, Leilei, 2022. "A two-echelon fuzzy clustering based heuristic for large-scale bike sharing repositioning problem," Transportation Research Part B: Methodological, Elsevier, vol. 160(C), pages 54-75.
    21. Jaâfar Berrada & Alexis Poulhès, 2021. "Economic and socioeconomic assessment of replacing conventional public transit with demand responsive transit services in low-to-medium density areas," Post-Print hal-03325200, HAL.
    22. Yang, Hye-jeong & Fang, Mingjie & Yao, Jinge & Su, Miao, 2023. "Green cooperation in last-mile logistics and consumer loyalty: An empirical analysis of a theoretical framework," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    23. Berrada, Jaâfar & Poulhès, Alexis, 2021. "Economic and socioeconomic assessment of replacing conventional public transit with demand responsive transit services in low-to-medium density areas," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 317-334.
    24. Nocera, Silvio & Pungillo, Giuseppe & Bruzzone, Francesco, 2021. "How to evaluate and plan the freight-passengers first-last mile," Transport Policy, Elsevier, vol. 113(C), pages 56-66.
    25. Bian, Zheyong & Liu, Xiang, 2019. "Mechanism design for first-mile ridesharing based on personalized requirements part I: Theoretical analysis in generalized scenarios," Transportation Research Part B: Methodological, Elsevier, vol. 120(C), pages 147-171.

    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. 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.
    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. Ferrari, Paolo, 2010. "Willingness to spend and road pricing rates," Transport Policy, Elsevier, vol. 17(3), pages 160-172, May.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. Yang, Hai & Meng, Qiang & Lee, Der-Horng, 2004. "Trial-and-error implementation of marginal-cost pricing on networks in the absence of demand functions," Transportation Research Part B: Methodological, Elsevier, vol. 38(6), pages 477-493, July.
    12. Feng, Zhuo & Zhang, Shui-Bo & Gao, Ying & Zhang, Shuai-Jun, 2016. "Subsidizing and pricing private toll roads with noncontractible service quality: A relational contract approach," Transportation Research Part B: Methodological, Elsevier, vol. 91(C), pages 466-491.
    13. Shao, Jing & Yang, Hangjun & Xing, Xiaoqiang & Yang, Liu, 2016. "E-commerce and traffic congestion: An economic and policy analysis," Transportation Research Part B: Methodological, Elsevier, vol. 83(C), pages 91-103.
    14. Xiang He & Xiqun (Michael) Chen & Chenfeng Xiong & Zheng Zhu & Lei Zhang, 2017. "Optimal Time-Varying Pricing for Toll Roads Under Multiple Objectives: A Simulation-Based Optimization Approach," Transportation Science, INFORMS, vol. 51(2), pages 412-426, May.
    15. Ma, Rui & Ban, Xuegang (Jeff) & Szeto, W.Y., 2017. "Emission modeling and pricing on single-destination dynamic traffic networks," Transportation Research Part B: Methodological, Elsevier, vol. 100(C), pages 255-283.
    16. Yang, Hai & Huang, Hai-Jun, 1999. "Carpooling and congestion pricing in a multilane highway with high-occupancy-vehicle lanes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(2), pages 139-155, February.
    17. Xiao, Feng & Long, Jiancheng & Li, Lu & Kou, Gang & Nie, Yu, 2019. "Promoting social equity with cyclic tradable credits," Transportation Research Part B: Methodological, Elsevier, vol. 121(C), pages 56-73.
    18. 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.
    19. 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.
    20. 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.

    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.