Tag Archives: Policy

Is Fare Free Transit Just?

I became interested in fare free transit since  Michelle Wu was elected the Major of Boston. She was the first female Asian major of the city, though her reputation as a disciple of Elizabeth Warren, the liberal firebrand in the U.S. senate,  probably overrode her other identities.  Among many of her agenda items was fare free transit (FFT), which caught my attention  not because it is especially progressive, but because it is a transit policy, which I happen to know something about.  Another source of inspiration for this paper came from Steven Dubner’s podcast on the subject a couple of years ago, which is entitled “Should Public Transit be Free”.

I shared the preprint with my department chair, Prof. Kim Gray, who is an environmental engineer but has a broad interest in anything related to sustainability and climate change. She was impressed and asked her assistant, Miss. Gina Twardosz, to write a news article to be posed on the department website. If you don’t want to read the paper itself, here is the link to that article. The abstract follows.


Abstract: Using a stylized transit design model, this study examines fare-free transit (FFT) through the lens of distributive justice. We pose a direct question: Is FFT just according to John Rawls’s theory of justice? Specifically, is it compatible with the resource allocation that maximizes the utility of the most disadvantaged travelers? We compare this egalitarian principle with a utilitarian one, which asserts that an allocation is optimal when it maximizes the total utility of all travelers. FFT is of course not free. In the absence of farebox revenue, a transit system must either cut services or turn to alternative sources, such as local dedicated taxes and fees levied on drivers. Thus, our model incorporates both finance and operational decisions, and captures the interaction between traffic congestion and travelers’ income level and mode choice. Using a case study built with empirical data in Chicago, we show that fare is not the first choice under either moral principle. For the egalitarian, the most desirable funding source is the driver fee, whereas taxation is preferred by the utilitarian. It follows that FFT can be both just and utility-maximizing, if one is allowed to raise taxes and charge drivers with impunity. However, as the flexibility in finance diminishes, so does the appeal of FFT. In such cases, the proposed model serves as a decision-support tool for finding sensible compromises that address the varied interests and ideologies at play. For example, it reveals that at the current tax rate of about 1% in Chicago, the Rawlsian egalitarian can justify FFT only if drivers pay about $1,800/year to fund transit, which amounts to about 18% of an average U.S. household’s driving cost.

To pool or not to pool

To Pool or Not to Pool: Equilibrium,  Pricing and Regulation

This paper was the first published based on  Kenan’s PhD research. It introduces ride-pooling into the equilibrium analysis of the ride-hail market and analyzes the effect of pricing strategies and various regulations on pooling.

After the first draft is completed in the Spring of 2019,  it took almost two years  to move the paper through various stages of the review process, first at Management Science, then at Transportation Research Part B (three rounds). While the long waiting was no doubt frustrating, the quality of the paper might have benefited from intensive scrutiny and repeated revisions.  For a preprint, please check here; the link to the final version is here.


Abstract: We study a monopoly transportation network company (TNC) in an aggregate market that offers on-demand solo and pooling e-hail services, while competing with transit for passengers. The market equilibrium is established based on a spatial driver-passenger matching model that characterizes the passenger wait time for both solo and pooling rides. We prove, under mild conditions, this system always has an equilibrium solution. Built on the market equilibrium, three variants of pricing problems are analyzed and compared, namely, (i) profit maximization, (ii) profit maximization subject to regulatory constraints, and (iii) social welfare maximization subject to a revenue-neutral constraint. A comprehensive case study is constructed using TNC data collected in the city of Chicago. We found pooling is desirable when demand is high, but supply is scarce. However, its benefit diminishes quickly as the average en-route detour time (i.e., the difference between the average duration of solo and pooling trips) increases. Without regulations, a mixed strategy—providing both solo and pooling rides—not only achieves the highest profit and trip production in most scenarios, but also gains higher social welfare. The minimum wage policy can improve social welfare in the short term. However, in the long run, the TNC could react by limiting the size of the driver pool, and consequently, render the policy counterproductive, even pushing social welfare below the unregulated level. Moreover, by maintaining the supply and demand of ride-hail at an artificially high level, the minimum wage policy tends to exacerbate traffic congestion by depressing the use of collective modes (transit and pooling). A congestion tax policy that penalizes solo rides promotes pooling, but consistently harms social welfare. However, it promises to increase both social welfare and pooling ratio, when jointly implemented with the minimum wage policy.

Travel demand management practice in China

This article stemmed from a research report commissioned by World Bank back in 2019.   I’ve never tried to publish it in a journal, though my friend Daizong Liu had helped translate it into Chinese and published it online through his very successful Wechat public platform (一览众山小).  The article reviews the travel demand management practice in China and attempts to draw some useful lessons from it.  You may read the abstract below and download the Egnlish version at ChinaTDM.


Lessons Learned from China’s Travel demand management practice

China’s car ownership has been expanding at a staggering pace in the past two decades. The rapid motorization brought unprecedented level of traffic to its densely populated cities
unprepared to accommodate it, causing severe congestion and air pollution problems. Chinese cities have responded to these challenges with sweeping travel demand management (TDM) measures. The practice of TDM in China is unique not only because it is large in scale and broad in scope, but also because it occurs against the backdrop of a fast and historical transition of the most populous country on earth. The objective of this note is to review and document this practice, discuss its outcomes and lessons, and examine what the rest of the world could learn from it.