  This paper presents a model addressing welfare optimal policies of demand
responsive transportation service, where passengers cause external travel time
costs for other passengers due to the route changes. Optimal pricing and trip
production policies are modelled both on the aggregate level and on the network
level. The aggregate model is an extension from Jokinen (2016) with flat
pricing model, but occupancy rate is now modelled as an endogenous variable
depending on demand and capacity levels. The network model enables to describe
differences between routes from the viewpoint of occupancy rate and efficient
trip combining. Moreover, the model defines the optimal differentiated pricing
for routes.
