The organization and operation of a taxi fleet

In dispatching a taxi fleet to meet random customer demand, two types of strategies must be defined: (a) the dispatching strategy, which sets the rules for choosing a taxi to serve a given call, and (b) the idle time strategy, which determines how the idle taxis are to be distributed most advantageously to meet future demand. The effect of dispatching and idle‐time strategies on taxi utilization and on passenger service is demonstrated under several conditions of operation. First, the simples taxi model is examined: random demand between two points serviced by one taxi. Next, we consider the effect of different strategies on the operation of a taxi fleet when demand is uniformly distributed in a two‐dimensional region. In the last section, the main properties of these simplified models are exhibited in an intermediate case by a Monte Carlo simulation of taxi service between a number of discrete points. The purpose of the paper is to provide simple and practical methods to determine the payoff in customer waiting time and/or taxi savings resulting from more sophisticated dispatching and idle‐time strategies. We conclude that good taxi redistribution policies markedly decrease customer waiting times, except when the level of taxi utilization is too high. Our results apply most directly to private transportation fleets, rather than to automobile taxi companies where cruising may be important.