A Pareto-improving and revenue-neutral scheme to manage mass transit congestion with heterogeneous commuters

Document Type

Journal Article

Publication Date


Subject Area

mode - mass transit, economics - revenue, policy - congestion, policy - fares, ridership - commuting


Departure time choice, Peak hours, Fare-reward scheme, Revenue-preserving, Pareto-improving


A hybrid fare scheme (HFS) is proposed in this paper that combines a fare-reward scheme (H-FRS) and a non-rewarding uniform fare scheme (H-UFS) by considering the heterogeneity in transit commuters’ scheduling flexibility. It aims at reducing peak-hour congestion in the urban transit system with alternative options catering for various commuters. In the H-FRS, a commuter will be rewarded with a free ride during the periods preceding or following a given shoulder period after taking a certain number of paid rides during the central period in peak hours. In the H-UFS, a commuter needs to pay a different but uniform fare during peak hours. Commuters will have the opportunity to join either of the sub-schemes according to their scheduling flexibility of departure time choice. The hybrid fare scheme determines the free fare intervals, the rewarding ratio, and the new fares for the sub-schemes. Our results demonstrate that the proposed HFS is not only revenue-preserving but also Pareto-improving. Depending on the original fare, an optimally designed hybrid fare scheme can achieve a reduction in total time costs by at least 25% with the optimal free fare interval.


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


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