A study of price elasticity of demand and its application in first mile/last mile service collaboration between mass transit and ride sharing providers

Abstract

Since today, Bangkok faces the big pollution and low mobility. One main reason is Bangkok people tend to travel by automobiles instead of the transit. The main problem of Bangkok transit especially Bangkok metro is the low accessibility to travel to/from the transit nodes and between nodes or as called First Mile Last Mile problem. Moreover, Bangkok metro transit fare is claimed that is too expensive compared to the cost of living and minimum wages in Bangkok. This research aims to study the price elasticity of demand for Bangkok metro which is the indicator of fare demand management in Bangkok metro transit that is important to have the public opinion on the fare with their range of acceptable price. Following to analyse the approach for the collaboration between Bangkok metro transit and ride sharing providers, in order to find the solution to improve the First Mile Last Mile of Bangkok metro transit and the accepted service fare strategy. The research methods are surveying the Bangkok metro users for the accepted fare opinion and interviewing the metro operators and ride sharing providers for the collaborative approach with their fare strategies. The results show the metro routes which is operated by Bangkok Mass Transit System Public Company Limited (BTSC) is elastic to demand and should discount its current fare base on users opinion. While the metro routes which is operated by Bangkok Expressway and Metro Public Limited Company (BEM) is inelastic to demand that its current fare is already in the accepted range. Moreover, the Bangkok metro operator and ride sharing provider accept the collaborative approach that is able to gain the mutual benefit for the transport providers to increase its service demand and for the Bangkok people to increase the conveniences and decrease cost of travelling in their daily life.