A macroscopic taxi model for passenger demand, taxi utilization and level of services

In most urban areas taxi services are subject to various types of regulatio n such as entry restriction and price control. However, effective intervent ion depends on generating and using suitable information on the demand-supp ly equilibrium of the taxi market. This paper develops a simultaneous equat ion system of passenger demand, taxi utilization and level of services base d on a taxi service situation found in the urban area of Hong Kong over the last ten years. A set of variables is introduced including number of licen sed taxis, taxi fare, disposable income, occupied taxi journey time as exog enous variables and daily taxi passenger demand, passenger waiting time, ta xi availability, taxi utilization and average taxi waiting time as endogeno us variables. These variables are coupled together through a system of nonl inear simultaneous equations whose parameters are estimated from survey dat a. The simultaneous equation system can be used to obtain useful regulatory information to assist with the decisions concerning the restriction over t he number of taxi licenses and the fixing of the taxi fare structure as wel l as a range of service quality control.