BUSINESS MODEL AND MECHANISM DESIGN FOR URBAN CO-MODALITY TRANSPORTATION

Abstract

With the growth of online shopping and the rise of the urban population, the surging parcel and passenger volume are imposing unprecedented pressure on urban transport systems. The massive increase in urban vehicles’ number leads to a series of emissions and congestion. On the other hand, public transport systems are often under-utilised during off-peak hours. In many cities, passenger flows typically fall by over 40% in off-peak hours. ‘Urban Co-modality’ has been proposed in this context to make use of existing urban passenger transport systems also to carry freights. Many Urban Co-modality practices have been observed in different cities worldwide by sharing public transport systems such as buses, trams, subways, and metros between passengers and freight. These practices show great potential in bringing economic and social benefits, such as cutting both emissions and congestion, enhancing the utilisation of existing infrastructures and increasing public transport operator revenue. Compared with the technical challenges faced by Urban Co-modality, stakeholder disagreements are more likely to impede Urban Co-modality operations. Therefore, it is important to find out a sustainable business model for this innovative urban transportation mode. First, this research proposes a simple business model considering one public transport operator and one logistics integrator. A game-theoretical analysis is conducted to examine the impact of strategic interaction between the two players. Second, a logistics service supply chain model is established considering the competition relationship between public transport operator and traditional transport service suppliers. Different decision-making modes are established and compared. Third, business models considering various logistics task assignment schemes were compared and analysed. Finally, we design the mechanism to encourage passengers to undertake Urban Co-modality logistics operation and explore the impact of this incentive mechanism on the co-modal system.

Keywords: urban co-modality; logistics service supply chain; urban logistics; game theory