The Importance of Taxi Services

Actual cities are oversaturated, on one hand, most of the population is concentrated in large cities (in 2030 more than 80% (UNFPA 2007) of the population will live in urban areas), on the other hand, heathrow airport taxi service needs of the modern population are growing continuously. While urban demand for trips is growing constantly, supply (capacity of city streets) is limited and must be optimized, not increased (most of the times not possible inside the city). Well planned, efficiently operated, and cost-effective transportation system management (TSM) strategies can improve mobility of existing systems for transportation users, especially in urban environments, where a good optimization of the infrastructure is needed (considering the high cost of building new facilities and the continuously increasing demand resulting from economic and population growth). Last years tendencies are shifting person trips from private vehicles to public vehicles, increasing the Public Transport share importantly. The most used Public Transports are the “Mass Transports” such as metro, tram or bus. This kind of transport usually has centralized management which uses ITS technologies developed in the last decade for an optimal operation of the service. Unfortunately, inflexibility, long total travel time and insufficient service coverage of Mass Transport systems cause a lower usage of them in most metropolitan areas. Oppositely, the taxi-cab sector is a more convenient mode due to its speediness, door-to-door attribute, privacy, comfort, long-time operation and lack of parking fees. The great inconvenience is the lack of central management; each gatwick airport to birmingham transfers is operated by an independent driver, taking his own decisions continuously, with a weak intent of control by the policy issues of each city such as license control or distributing the working days of the taxi vehicles (normally the control is imposed on vehicles, not on drivers, generating double shift and increasing the use of taxis). An important percentage of the cars (e. g. 60% in Hong Kong (Yang et al. 2000)) in the daily flow are taxis, most of them empty taxies. This situation is creating two problems, an internal problem to the taxi drivers (higher empty kilometers means lower benefits) and an external problem to the citizens (congestion and pollution). The first problem is being aggravated with the actual economic crisis, which is breaking the market equilibrium: demand is decreasing due to the lower incomes of the population and offer is increasing due to the increasing number of taxi drivers (not taxi licenses). Market equilibrium cannot be achieved in this concrete market because of the regulations (price is not established freely), and cannot go to the next equilibrium point due to the price policies imposed in each city. This is a vicious cycle, where empty hours are increasing, and taxi drivers need to work more time in order to have the same income, which means lower income per hour (Daniel (2006)). In this situation, taxi drivers prefer to stop at taxi stands and wait for a client, without expending fuel in empty trips and consequently saturating the taxi stands. If the taxi stops network is not well designed, this situation will create a decrease in the Level of Service of the passengers, decreasing the demand and congesting the streets near the heathrow airport to birmingham transfers stops. The taxi sector has been traditionally a regulated market in terms of fares and entry control. The objective of this regulation is to correct the defects of the taxi sector, such as externalities (congestion and contamination), low level of service offered and anticompetitive behavior of the market.