Impact of congestion charging on the transit market: An inter-modal equilibrium model

Document Type

Journal Article

Publication Date


Subject Area

operations - traffic, ridership - commuting, ridership - demand, policy - congestion, economics - pricing, economics - profitability, organisation - competition, place - urban, mode - mass transit


Urban transit, Urban networks, Travellers, Travelers, Transit users, Transit operating agencies, Transit lines, Transit, Traffic congestion, Supply and demand, Road networks, Public transit lines, Public transit, Public sector, Profit maximization, Network equilibrium, Mathematical models, Mass transit lines, Mass transit, Markets, Local transit, Intermodal transportation, Intermodal systems, Inconsistency, Highway users, Gridlock (Traffic), Governments, Equilibrium (Systems), Edinburgh (Scotland), Congestion pricing, Competition


An inter-modal equilibrium model links an urban road network subject to a congestion charge to a parallel urban transit market, with a view to finding the optimum congestion charge consistent with the commercial decisions of the transit operator(s). A congestion charge is set to maximise social surplus. Travel behaviour is assumed to conform to elastic-demand user equilibrium traffic assignment. The transit market is assumed to be either a profit maximising monopoly or a profit maximising duopoly competing non-cooperatively. The operator(s) set the fares to maximise profits and the supply of transit services are determined by the resulting demand. The problem has been formulated as a bi-level programme with the determination of the congestion charge on the upper level and the setting of transit fares on the lower level. In the case of non-cooperating operators, the Bertrand-Nash equilibrium fares are sought. The results of the model are analysed for a small example based loosely on Edinburgh. This reveals the importance of competition in the transit market for the trade off between the government, the transit provider(s) and the travellers.