This paper studies the joint impact of congestion surcharge and wage regulation on transportation network companies (TNCs) . These impacts are assessed by a market equilibrium model that captures the incentives of the passengers, drivers , and the platform, and accounts for the congestion externalities of the TNC vehicles. Under a wage floor on TNC drivers, we consider two schemes of congestion surcharges : (a) surcharge based on each TNC trip , and (b) surcharge based on each vehicle hour (regardless of whether the vehicle has a passenger or not) . We show that both congestion surcharges can reduce the TNC ridership, but their impacts are mitigated by the wage floor and cannot significantly reduce the number of TNC vehicles . In contrast to the trip-based surcharge, we advocate the time-based congestion surcharge, which penalizes idle vehicle time and improves the vehicle occupancy. Through a case study for San Francisco, we show that the time-based congestion surcharge offers a Pareto improvement. It leads to higher passenger surplus, higher driver surplus, higher platform profits, and higher tax revenue for the city.
This paper describes the impact on transportation network companies (TNCs) of the imposition of a congestion charge and a driver minimum wage. The impact is assessed using a market equilibrium model to calculate the changes in the number of passenger trips and trip fare, number of drivers employed, the TNC platform profit, the number of TNC vehicles , and city revenue. Two charges are considered : (a) a charge per TNC trip similar to an excise tax , and (b) a charge per vehicle operating hour (whether or not it has a passenger ) similar to a road tax. Both charges reduce the number of TNC trips, but this reduction is limited by the wage floor , and the number of TNC vehicles reduced is not significant. The time-based charge is preferable to the trip-based charge since, by penalizing idle vehicle time , the former increases vehicle occupancy. In a case study for San Francisco, the time-based charge is found to be Pareto superior to the trip-based charge as it yields higher passenger surplus, higher driver surplus, higher platform profits, and higher tax revenue for the city.
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