Taxi pricing analysis under government price regulation —A Case study of Shenzhen taxi market

摘要

Taxi price is often regulated by local government. Based on taxi market analysis, this paper develops a useful model to determine average taxi price of per ride. Make sure the customers obtain maximum consumer surplus and the taxi operators won't lose. Then, a practical 4-step method is presented to estimate initial charge, initial distance and different distance-based charge corresponding to different distance sections. It is meaningful to prevent some taxi drivers from refusing the short-distance customer. At last, a case study of Shenzhen taxi market is introduced to illustrate the price formula and spell out this 4-step method.