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A modelling study of a taxi service operation

Deng, C C; Ong, H L; Ang, B W ; Goh, T N . International Journal of Operations & Production Management 12.11 (1992): 65.
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Optimal crew allocation and scheduling is an important issue in the management of a large fleet of taxis. A modeling study is presented of a taxi service operation in a Singapore public transport company. In Singapore, the taxi service problem is different from the general diala-ride problem because customers do not call a dispatcher; they normally wait along roads and flag down taxis. Two quantitative techniques are proposed: the queueing analysis approach and the integer programming approach. These techniques can be used to allocate and schedule the taxi fleet to cover the demand for services at various time periods and in various geographical zones. A routing and scheduling management information system is presented to support schedulers in making routing and scheduling decisions. With a few modifications, the models and information system may be applied to the efficient allocation and scheduling of police patrol cars.

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INTRODUCTION The study presented in this article is based on a taxi service situation found in Singapore, where the common practice and a significant aspect of the operation of a fleet is that taxis ply the roads for business. Passengers rarely have to book taxis to secure their service. Instead, they normally wait along roads and flag down any empty taxi. If advance bookings are made, the response time required is usually short. Hence, the taxi service problem in Singapore is different from the general dial-a-ride problem where customers call a dispatcher or scheduler for service and each customer specifies a distinct pickup and delivery point and, perhaps, a desired time for pickup or delivery 1!. In the dial-a-ride problem, a request for service can be in one of the two forms: dynamic or real-time where customers demand immediate service, and subscriber or static where all customers call in advance so that a complete knowledge of customer demand is known before any routing or scheduling is carried out. In both cases, precedence relationships exist since a customer must be picked up before he is delivered. We propose a model that could be used by the owner of a large taxi fleet to allocate efficiently the taxis to cover the entire country. Firstly, the country is divided into service zones and the demand pattern for each zone over various time periods is modelled by a queuing model. The number of taxis required to meet the demand in each zone is determined by a queuing analysis. Integer programming is used to determine the schedule of drivers. Finally, we propose a routing and scheduling management information system to assist the scheduler in making routing and scheduling decisions in a dynamic situation. The article describes a potentially beneficial methodology. The next phase is the implementation of recommendations, and to this end discussions are in progress with one of the major taxi companies in Singapore. TAXI OPERATIONS AND CONTROL In this section, the general characteristics of taxi operations and

control are discussed. To maximize revenues and savings, and to have a better control over the taxi fleet, service zones are created. The formation of each zone could be based on the demand, on geographic considerations, or on fairly well-defined territorial considerations such as industrial areas, residential areas and the central business district. Regardless of how the zones are demarcated, the operational requirements remain the same. Taxi vehicle rental of S$78 per 24 hours and fuel costs are borne solely by the drivers (S$ signifies the Singapore dollar and in 1991 US$1 = S$1.80). Vehicle operating costs which include vehicle insurance, road tax and vehicle maintenance are borne by the transport company that owns the taxi. The driver's daily income is his total receipts less the taxi rental and fuel costs. This arrangement provides an incentive for the drivers. TAXI FARE STRUCTURE The taxi fare is based on an initial charge of S$2 .20 for the first 1.5 km, $0.44 for every increment of 1 km up to 5 km, and $0.50 for every subsequent increment of 1 km thereafter. In addition to this basic fare, additional charges may be payable under different circumstances; a summary of these charges is given in Table I. (Table I omitted) TAXI SHIFT STRUCTURE Most taxis operate on two shifts, from 6 a.m. to 6 p.m. and from 6 p.m. to 6 a.m. the following day. Although the shift duration is 12 hours, a survey shows that, on average, a taxi driver drives only 8 to 10 hours per shift. We present two models for the integer programming approach: the first model is formulated for the actual two-shift taxi operation and the second presents a six-shift situation where, at any time, there are two overlapping shifts. The second model ensures that there are taxis around in each zone to cater for the demand during change of shifts. The overlapping shifts may take the form shown in Table II, where a shift starts every four hours. (Table II omitted) In both models, an hour within each shift is allocated for a meal break. The demand for taxis fluctuates throughout the 24-hour period and the demand pattern varies for different locations. Based on the nature of service, the taxi drivers are divided into two categories as follows: (1) Taxi drivers assigned to zones. At the beginning of each shift, the

taxi drivers will start from the central taxi depot or a location predetermined by the drivers of successive shifts. After collecting their vehicles, the drivers will proceed to their assigned zones. The drivers for each zone are fixed, but switching of drivers between zones is possible under special cases. Each driver is assigned to only one zone to familiarize him with the roads within that zone and to provide a better service. Within their respective zones, the drivers will ply along the "high potential roads" vying for customers. If a taxi is flagged down and has to move away from the assigned zone, it will return to the assigned zone once the customer is served. As a rule, all customers are to be served unless the driver is heading to change shifts or proceeding for a meal break. If any Mass Rapid Transit (MRT) station falls within a Zone, a specified number of taxis allocated to the zone will be assigned to the taxi stand of the MET station at peak hours to provide shuttle services to customers. Figure 1 illustrates the flow of activities of these drivers. (Figure 1 omitted) (2) Taxi driven assigned to taxi stands at the airport or hotels. A schedule will be given to indicate when these drivers are required to be stationed at the airport. When not required, they will be assigned to one of the major or popular hotels. The schedules at the airport can be determined from the flight arrival frequency, and the estimated number of passengers from each flight that will leave the airport by taxi. If the destination of a passenger from the airport is a hotel, or vice versa, the driver will remain at the destination to wait for another fare. Otherwise the driver will proceed to any hotel, or the airport, according to his planned schedule. The driver may pick up passengers along the way if his schedule permits it. Figure 2 illustrates the flow of activities of these drivers. (Figure 2 omitted) QUEUEING ANALYSIS APPROACH A typical customer demand profile over a 24-hour period is shown in Figure 3. (Figure 3 omitted) It shows the hourly arrival rate of customers and highlights the morning and evening peak hours. It illustrates the demand pattern for a zone encompassing residential and industrial estates. The morning and evening peak periods are most pronounced; demand is high in the morning when residents leave for work and in the evening when workers leave their workplaces, ones which encompass only housing estates would only have the morning peak. For the business district,

where activity is high throughout the working hours (from 8.30 a.m. to 5.00 p.m.), the customers' demand profile would generally be higher than the other zones during this period while that outside the office hours would generally be lower than the other zones. Actual studies must be made to determine the specific arrival characteristics of each zone and the demand patterns for weekdays and weekends. The arrival rates of passengers from the airport can be determined from the fight arrival frequency and the nature of the flights, i.e. whether a given fight is international, transit, or short-distance. Information on the percentage of passengers that will leave the terminal by taxis and the average number of passengers that each taxi carries 2! is also pertinent to the analysis. Once the demand pattern is established for each zone and the airport, the next step is to determine the number of taxis required for each category of taxi drivers. QUEUING RELIABILITY ANALYSIS APPROACH The number of taxis required in each zone can be determined by modelling the demand pattern as a queuing model. The arrival rate, the number of taxis on duty, and other factors are time-dependent. We define Ht as the minimum number of taxis needed to allocate to hour t (t = 0, ..., 23; hour 0 = 24), where hour t denotes the clock hour within a 24-hour period, and mu sub t denotes the service time, stating from pick up to delivery of customers, for hour t. We also define gamma sub t as the average hourly arrival rate and assume a constant arrival rate for each hour. Our objective is to determine N sub t such that during any hour t, the probability of demand for taxis being less than or equal to N sub t must be greater than or equal to alpha, i.e. Prob (N sub c (t) <= N sub t ) >= alpha where ct is the desired service level of the system and N sub c is the number of customers demanding service. The higher the value of alpha, the better will be the level of customer service but the higher will be the investment cost for taxis. Even though queues building up in hour t may carry over into hour t + 1, the use of a constant gamma sub t to determine N sub t is reasonable because, if alpha is close to 1, the probability of a queue will be small 3!. There will therefore be little or no carry-over and

hours t and t + 1 will be approximately independent. Furthermore, although the arrival rates of customers change over time, the changes between successive hours are, in general, small. With the average hourly arrival rates for the intervals in each zone established, we can model each interval as an (Figure omitted):(Figure omitted) queuing system. This model assumes that the probability that a given number of customers requiring service during hour t follows a Poisson distribution with the mean arrival rate of that time interval. The service time N sub t is taken to be the average time mu sub t required to serve each customer. Although the road traffic conditions will vary for different hours, the difference will be slight for a normal day because of the efficient road system in Singapore. A survey has estimated that for each customer, the average distance travelled is between 10 to 12 km and the entire journey takes about 20 minutes. With a constant mu, the queuing model becomes (Figure omitted):(Figure omitted). Koopman 4! showed that the expected waiting time and the expected number of customers in the queue for an (Figure omitted) queue are insensitive to whether or not the service distribution is negative exponential or constant. It is therefore reasonable to assume that the expected time derived from the (Figure omitted):(Figure omitted) model can be used to approximate the expected waiting time in the system for the (Figure omitted):(Figure omitted) model. Furthermore, in cases where the arrival process is Poisson and service time is not exponentially distributed, results from simulations were reported to be very close to the analytical results of the (Figure omitted):(Figure omitted) model 5,6!. This suggests that the analytical queuing model is appropriate. let P sub j (t) denote the stationary probability that j customers are in the system during hour t, given that N sub t taxis are on duty with arrival rate gamma sub t and service rate mu. P sub j (t) for the (Figure omitted):(Figure omitted) model is given by 7! (Equations omitted) where Pi sub t = (Figure omitted) or hour t. With a given value of alpha, we can then determine the smallest number of taxis N sub t required for each hour t, such that (Equation omitted)

QUEUING COST-ANALYSIS APPROACH This approach alms at determine the optimal number of taxis required for each hour such that the total operation cost is minimized. The total operation cost is the sum of the cost incurred on the taxis and the cost of lost sales due to insufficient taxis. These two cost components are given in terms of the cost of one taxi per hour and the estimated cost of lost sales per hour per customer, respectively. The cost of one taxi per hour can be estimated from the initial investment cost (I sub c ), the annual maintenance cost (M sub c ), and the annual operating cost (O sub c ). The operating life of a taxi in Singapore is seven years and, assuming a straight-line depreciation with no salvage value, the annual investment cost is (Figure omitted). Since taxis are used almost every day of the year and throughout the entire day, it is reasonable to consider a 365-day year and a 24-hour day when determining the cost of one taxi per hour. Defining F sub 1 to be 1/(24 x 365), the cost of one taxi per hour is (Figure omitted). The cost of lost sales per hour per customer can be estimated from the average revenue collected R sub s , the average number of customers served C sub s , and the average number of hours driven by each driver H sub s , all on a per-shift basis. The cost of lost sales per hour per customer is given by (Figure omitted). The average revenue and the average number of customers for each taxi per shift can be obtained fairly accurately from the fare meter. A survey has shown R sub s , C sub s and H sub s to be $120, 20 customers and 8 hours respectively. The estimated average cost of lost sales per hour per customer is therefore computed to be S$0.751/hour/customer. Assuming that competitors will "snatch up" all other customers in the queue, the total operation cost can be formulated as follows: let C sub T be the cost of one taxi per hour, C sub c the cost of lost sales per hour per customer, N sub t the number of taxis required for hour t, and L sub Q the expected number of customers in the queue, given N sub t . The total cost of the operation for hour t given the number of taxis N sub t is TC(N sub t ) = C sub T N sub t + C sub C L sub Q Based on the proposed queuing model, the total cost TC is given by

(Equation omitted) where (Equation omitted) and (Figure omitted) is the probability of having N sub t customers in the system at hour t. The procedure for calculating the optimal number of taxis needed for hour t is as follows: Step 1. For a given set of values of C sub T , C sub c , (Character omitted) and N sub t , compute the total cost TC(N sub t ). Step 2. Compute the total cost TC for N sub t = N sub t + 1. Step 3. Repeat Step 2 until the optimal value of N sub t that minimizes the total cost TC is found. The procedure is repeated to determine the optimal values of N sub t for t = 0,...,23 (hour 0 = 24) for each zone. INTEGER LINEAR-PROGRAM APPROACH Two integer programming models are presented to determine the shifts assignment and meal-time assignment of taxi drivers for the zones and the airport services. The first model is for the existing twoshift situation, while the second is a six-shift overlapping model. An illustration of the second mathematical model is given in Figure 4. (Figure 4 omitted) The number of taxis required for each time interval is determined from the previous analysis. Solutions to each integer program will provide the minimum number of taxis required at the start of each shift, such that the demand constraints are satisfied over a 24-hour period. MODEL 1--AN ACTUAL OPERATIC CASE The parameters are N sub t , the number of taxis required for hour t, t = 0,..., 23 (hour 0 = 24), and S sub i , the start time of shift i, i = 1,

2. The variables are X sub i , the number of taxis starting work at the beginning of shift i, i = 1, 2, and (Character omitted), the number of taxis from shift i having a meal break at hour t. The integer linear-program formulation for model 1 is: (Equation omitted) Constraint (1) ensures that every driver is assigned a meal break, and constraint (2) ensures that the taxis on duty (number of taxis assigned minus number of taxis on meals) meet the hourly requirements. Model 1 formulation with two starting shifts and possible meal times at any hour results in 24 independent variables and 26 constraints. MODEL 2--SIX-SHIFT OPERATING CASE The parameters are Ht, the number of taxis required for hour t, t = 0,..., 23 (hour 0 = 24), and S sub i the start time of shift i, i = 1, 2 ,...,6. The variables are X sub i , the number of taxis starting work at the beginning of shift i,i = 1,2 ,...,6, and M sub i,j , the total number of taxis from shift i having a meal break in the first half of shift j. Note that j = i is permissible, and M sub i , j is defined as (Equation omitted) where (Character omitted) is !he number of taxis from shift i having a meal break in first half of shift j starting at hour t. The integer linear-program formulation for model 2 is: (Equation omitted) Subject to M sub i,i + M sub i, (i + 1) = X sub 1 i = 1,..., 5 M sub i,i + M sub i,1 + X sub i i = 6 (Equations 5 and 6 omitted)

Constraints (3) and (4) ensure that every taxi driver is assigned a meal time, and constraints (5) and (6) ensure that the actual taxis on duty meet each of the hourly requirements. The above formulation with six starting shifts and possible meal times at any hour results in 48 independent variables and 30 constraints. Both formulations allow meal breaks to occur at any hour within each shift. However, additional constraints can be included to restrict the meal breaks to certain hours only. Reasonable periods for meal breaks are given in Table III. (Table III omitted) The optimal solution to the second integer program may force certain shifts to be redundant. In such case, additional measures may have to be taken by the transport company to cater for the demand of the zone during the transition of drivers between successive shifts. A SUPPORTING ROUTEING AND SCHEDULING MANAGEMENT INFORMATION SYSTEM The development of a computerized routeing and scheduling management information system (RSMIS) is essential to provide the necessary real time information to support the computerized routeing and scheduling process, and to yield the benefits of the process. Such a system can reduce total travel distance by 10 to 15 per cent 8,9!. Other potential benefits include reduced scheduling time, better representation of results, analysis of operating statistics, and communication with other systems 10!. A systems design for the RSMIS is presented in this section for the taxi service operation. The system utilizes real-time information from customers, taxi drivers and traffic police through communication facilities to explore various alternatives quickly and to provide the best alternatives to the decision maker. It also provides interactive facilities which allow the user to make alterations to the computer-suggested solutions and to incorporate human experience in generating feasible routes and schedules 10,11!. INPUT REQUIREMENT FOR THE RSMIS Inputs for the RSMIS are organized into the following data files. CUSINFO. This file contains data on the location and destination of every customer and the time at which they require the transport service. The time information specifies whether each customer requires immediate service, or booking of service at some particular

time. For the location and destination, two levels of information are kept. At the first level, the general location and destination (e.g. zone, district) of each customer is identified. The second level uses a squaregrid system, in which the entire country is divided into grid squares with each square identified by name or co-ordinates. The second level of information identifies the location and destination of each customer by the grid reference. TAXISINFO. This file contains information on all active taxis. It contains their availability status (available or not available), the zone into which each is assigned, each present approximate location, the vehicle registration numbers, and each customer's destination, if any. It also contains the schedule of each taxi throughout the entire period of its shift. ROADINFO. This file contains the direct distance between the centres of any two grid squares identified by the grid system. VEHINFO. This file contains information on all taxis owned by the company. The vehicle registration numbers, the operational state, and the maintenance schedule of each vehicle. SHIFTINFO. This file contains shifts information. It keeps track of the shift and meal-break assignments of each driver. DECISIONINFO. This file contains all the assignments of taxis to requesting customers and is updated periodically to remove obsolete information. TRAFFICINFO. This file contains real-time traffic information for the whole country. It holds information on the weather, accidents, traffic congestions, and road works. INTEGRATION OF THE RSMIS WITH THE ACTIVITIES OF THE CONTROL CENTRE The flow charts shown in Figures 1 and 2 illustrate the activities involving each category of drivers during each shift. They also indicate the information required to be fed back at each stage to maintain the RSMIS at the control centre. Feedback from taxis to the control centre is via radiophone. Figure 5 illustrates the activities at the control centre. It shows the constant updating of the RSMIS with real-time information to integrate with the routeing and scheduling system. The

routeing and scheduling system provides the decision maker with the best options to minimize travelling cost and to provide a good level of customer service. On receiving a phone-in request, the location, destination, and requested time of service are recorded in the CUSINFO file. Once these basic information items are entered, the scheduling system takes over. The system determines whether the customer requires an immediate response. If yes, the scheduling system locates all available taxis using the TAXISINFO file, and from the ROADINFO file determines the approximate distance between the available taxis and the requesting customer's location. The approximate distance is computed alter a check is made with the TRAFFICINFO file to determine the route feasibility. The checking module must be intelligent enough to determine the best route that would be taken by each available taxi to reach the customer. If the traffic conditions are not conducive for some of the taxis to reach the customer's location, these taxis are not given to the decision maker as options. Once the best available taxis have been located, the computer searches the currently unavailable taxis, and determines those that are heading to locations near that of the requesting customer. The best options from the available and unavailable taxis are given to the decision maker (scheduler) to confirm his selection. Once the selection is made, the DECISIONINFO and TAXISINFO files are updated. The customer is notified of the taxi (vehicle registration number) which will be serving him and the estimated time of arrival. The assigned driver is given the relevant customer's information. If the customer requires service at a later time of the day, the DECISIONINFO file is checked to determine the existing schedules of all taxis on current and future shifts. Those that will be in the requesting region at approximately the requested time are highlighted as options. If no such taxis are found, then the taxis that will be plying the region at the requested time are highlighted. The best options are given to the decision maker who confirms the selection. The customer and the assigned driver are then notified of the relevant information. CONCLUSION This article examines the operational aspects of a centrally owned taxi fleet for the efficient allocation of taxis. It proposes zoning the entire service area and determining the operational characteristics of each zone. Queueing theory is then utilized to determine the number of

taxis required at the zone level. Two integer linear programs are formulated to construct optimal schedules for the drivers in two different situations. The formulations also determine the number of drivers to be assigned to different meal-break times during the planning period, such that the demand constraints are not violated. A systems design on the development of a routeing and scheduling management information system (RSMIS) is presented, and the integration of this RSMIS with the scheduling system for taxi service operation is discussed. The emphasis of this article is on the methodology, which is developed from actual taxi operating practices in Singapore. With minor modifications, the models and information system described are applicable also to the efficient allocation and scheduling of police patrol cars. The models should serve to improve the efficiency of the operations management of a fleet of vehicles and increase the level of customer service and business competitiveness. REFERENCES 1. Bodin, L.D., Golden, B.L., Assad, A.A. and Ball, M.O., "Routing and Scheduling of Vehicle and Crews, the State of the Art", Computers and Operations Research, Vol. 10 No. 2, 1983, pp. 63-211. 2. Alec, M.L., Applied Queueing Theory, St Martin's Press, New York, NY, 1968. 3. Kolesar, P.J., Rider, K.L., Crabill, T.B. and Walker W.E., "A Queueing-Linear Programming Approach to Scheduling Police Patrol Cars", Operations Research, Vol. 23 No. 6, 1975, pp. 1045-62. 4. Koopman, B.O., "Air Terminal Queues under Time-dependent Conditions", Operations Research, Vol. 20 No. 6, 1972, pp. 1089-114. 5. Ong, H.L., Goh, T.N. and Sim, H.K., "A Modelling Study of Machineservice Operation in an Electronics Industry", Journal of the Operational Research Society, Vol. 36 No. 11, 1985, pp. 993-8. 6. Lawrie, N.L., "An Application of Queueing Theory to a Teletraffic Problem", Journal of the Operational Research Society Vol. 31 No. 11, 1981, pp. 975-81.

7. Taha, H.A., Operations Research: An Introduction, 3rd edition, Collier Macmillan, London, 1982. 8. Beasley, J.E., Route First-cluster Second Methods for Vehicle Routing", Omega, Vol. 11 No. 4, 1983, pp. 403-8. 9. Waters, C.D.J., A Solution Procedure for the Vehicle Scheduling Problem Based on Iterative Route Improvement", Journal of the Operational Research Society Vol. 38 No. 9, 1987, pp. 833-9. 10. Waters, C.D.J., "Expert Systems for vehicle Scheduling", Journal of the Operational Research Society Vol. 41 No. 6, 1990, pp. 505-15. 11. Assad, A.A., "Modeling and Implementation Issues in Vehicle Routing", in Golden, B.L. and Assad, A. A., (Eds), Vehicle Routing: Methods and Studies, Elsevier Science Publishers, Barking, Essex/North-Holland, Amsterdam, 1988, pp. 745. Word count: 4447 Copyright MCB University Press Limited 1992

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Subject Studies; Scheduling; Routing; Queuing theory; Operations research; Motor vehicle fleets; Integer programming Location Singapore Classification 9179: Asia & the Pacific 9130: Experimental/theoretical treatment 2600: Management science/operations research

Title A modelling study of a taxi service operation Author Deng, C C; Ong, H L; Ang, B W; Goh, T N Publication title International Journal of Operations & Production Management Volume 12 Issue 11 Pages 65 Number of pages 14 Publication year 1992 Publication date 1992 Year 1992 Publisher Emerald Group Publishing, Limited Place of publication Bradford Country of publication United Kingdom Publication subject Business And Economics--Management ISSN 01443577 CODEN IOPMDU Source type Scholarly Journals Language of publication English Document type PERIODICAL Accession number 00662435 ProQuest document ID 232363357 Document URL http://search.proquest.com/docview/232363357?accountid=32277

Copyright Copyright MCB University Press Limited 1992 Last updated 2010-06-10 Database ProQuest Central

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