Document Type

Journal Article

Publication Date


Subject Area

planning - route design, land use - planning, ridership - mode choice, ridership - commuting, policy - fares, economics - profitability, economics - profitability, mode - mass transit


Welfare economics, Transit, State-augmented multimodal network, Route selection, Route choice, Public transit, Profitability, Private sector, Private enterprise, Planning, Multimodal transportation, Multimodal systems, Mode choice, Modal choice, Mass transit, Local transit, Hong Kong (China), Fares, Choice of transportation, Case studies


Public transit systems play a pivotal role in serving the transportation needs of many major cities. In Hong Kong, for example, more than 90% of the 11 million daily trips are provided by public transit services. The planning and design of these services, therefore, are important welfare considerations. The situation is particularly intriguing if these services are to be provided by the private sector whose primary objective is not to ensure welfare gains or an efficient utilization of the road space but to maximize profit. Analyses are of significant interest and potential application to many transit-oriented cities. In metropolitan areas in which multi- or intermodal trips are common, modeling the multimodal route-choice characteristics of heterogeneous travelers and the strategic interactions among the many private firms are important issues. In this study, mode-choice models were integrated in a network of competing transit operators. A novel network structure, designated as the state-augmented multimodal (SAM) network, was developed via a state augmentation approach. With this SAM network, the effect of fare competition and regulations on social welfare as well as on profitability of the companies could be examined. A case study of the ground transportation system connecting the Hong Kong International Airport with the city's downtown was conducted.