Choosing a flat rate over a pay-per-use tariff for public transport: Do psychological factors matter?

Authors

Christian Weibel
Lisa Dang
Widar von Arx

Document Type

Journal Article

Publication Date

2024

Subject Area

place - europe, planning - marketing/promotion, ridership - mode choice, technology - emissions

Keywords

Taximeter, Flexibility, Cost control, Precommitment, Flat rate, Pay per use

Abstract

We investigate the relationship between various psychological factors (taximeter effect, flexibility effect, cost control effect, pre-commitment effect), annual distance traveled, and public transport tariff preferences (pay-per-use vs. flat rate). While a pay-per-use tariff entails ticket prices depending on usage intensity, a flat rate involves an annual public transport subscription covering all journeys within a year. Drawing from a sample of 3,381 Swiss public transport customers utilizing either the pay-per-use option or holding a flat-rate subscription, a binomial logistic regression highlights that the number of passenger kilometers traveled (pkm) predominantly influences the choice of a flat rate. However, the examined psychological factors also significantly shape decision-making. Notably, these effects vary based on the quantity of the product consumed. Specifically, both the taximeter and cost-control effects tend to increase with pkm. Conducting a simulation using binomial logistic regression, we illustrate how different psychological factors are related to the likelihood of opting for a flat-rate subscription. The findings suggest that the level of importance of the psychological factors are relevant to predict the odds of selecting a flat-rate subscription. Hence, emphasizing product advantages in marketing communications and strategically adjusting product design to leverage these psychological factors emerge as effective strategies for enhancing sales promotion and fostering customer loyalty. These results offer insights into consumer psychology and decision-making within the transportation sector. The implications are particularly valuable for managers aiming to address barriers to public transport use. By strategically refining ticket product ranges, managers can actively contribute to reducing CO2 emissions through induced modal shifts.

Rights

Permission to publish the abstract has been given by Elsevier, copyright remains with them.

Comments

Transportation Research Part A Home Page:

http://www.sciencedirect.com/science/journal/09658564

Recommended Citation

Weibel, C., Dang, L., & von Arx, W. (2024). Choosing a flat rate over a pay-per-use tariff for public transport: Do psychological factors matter?. Transportation Research Part A: Policy and Practice, 190, 104247.