Design of Distance Tariffs in Public Transport

Setting the ticket prices is a crucial decision in public transport. Its basis, relevant for all related questions, such as dynamic prices or prices for different passenger groups, is the underlying fare strategy. Popular fare strategies are based on zones or on distances. Transitions from one fare strategy to another occur frequently, e.g., if public transport operators are joined to a larger association, or if structural decisions in a region have taken place. In this paper we report practically relevant issues when a fare structure should be changed to a distance tariff, a problem frequently arising when a ticket system based on mobile devices is introduced. We present mixed-integer linear programs for finding the parameters of a distance tariff, analyze rounding properties, and reflect how the change in revenue for the operator and the number of highly affected passengers can be controlled. Additionally, we evaluate the developed models experimentally.