Modeling urban-level impact of a shared taxi market

Taxi systems are being challenged by alternative, emerging services like Uber, Lyft, and Sidecar, which increasingly offer the option of ride sharing. While the enormous potential of ride sharing has been unveiled in a number of recent papers, it also raised legitimate concerns about the potentially disruptive impact on other transportation modes. In this paper, we introduce a framework for estimating the urban-level impact of ride sharing applied to the current taxicab service. First, we extend a representative economic model of regulated taxi markets to include ride sharing. The model allows predicting the interactions between demand and supply of a shared taxi service based on a few representative parameters, and is rooted on data analytical results. Then, we apply our model to the case study of the New York taxi market. The analysis highlights the dramatic impact of the pricing policy and taxi fleet management on the urban-level, systemic outcomes of a shared taxi system.