Optimizing fares and transfer discounts for a bus-subway corridor

Abstract

This paper aims to optimize fares and transfer discounts for public transit service along a bus-subway corridor with the consideration of effects of uncertainty in travel times and difference in stop spacing between bus and subway services on passenger behavior. The former factor is captured by the reserved time in travel cost and the latter one produces some passenger Origin–Destination (O–D) pairs along the corridor that can not be served by one mode only. This problem is formulated as a bi-level program, of which the upper level maximizes the social welfare and the lower-level capturing traveler choice behavior is a variable-demand Stochastic User Equilibrium (SUE) assignment model. A Genetic Algorithm (GA) is applied to solve the bi-level program while the Method of Successive Averages (MSA) is adopted to solve the lower-level model. A series of numerical experiments are carried out to illustrate the performance of the model and solution method. Numerical results indicate that the implementation of transfer discounts may be of great benefit to the social welfare and that the uncertainty in travel time and the difference in stop spacing play an important role in determining optimal fares and transfer discounts for the service along a bus-subway corridor.