4d’s Of Taxi Fares: A Behavioural Model For The Ict Age

Abstract

Price influences the behaviour of people. It follows that the quality of a taxi service and the behaviour of the driver depends on the fare structure. This paper finds that the contribution approach to pricing as opposed to the cost plus pricing used universally can provide the ‘motivation handles’ to influence the behaviour of drivers, passengers and all stake holders. A real life example from Chennai, India is used to demonstrate a scientific fare structure. It is based on the four Ds of a fare mix: Distance, Duration, Drop and Discern. Such pricing granularity can be implemented with the advances in information and communication technology (ICT) of today. The transparency of the structure can balance the needs and costs of all the stake holders—passengers, drivers, other road users, owners, capital and society.