THE SERVICE CHOICE MODEL
As mentioned in the previous section, we attempt to create
a model that includes multiple modes of operations. More
specifically, we assume that taxi drivers can either choose to
serve the general traffic network by roaming, or alternatively,
they can choose to wait at one particular taxi stand.
Generally speaking, serving a taxi stand could provide
more stable income since demand pattern at a particular
taxi stand is usually more recurrent and predictable than
roaming on the road. However, the benefit of serving the
taxi stand would vanish quickly with the length of the queue.
Following this intuition, if the waiting time at the queue is
monotonically decreasing in the queue length, the optimal
policy for drivers should then be threshold-based. The main
advantage of having a threshold-based policy is that it is
very easy to understand (and thus easy to implement) for
taxi drivers. For taxi fleet operators, the threshold-based
policy also allows quick and efficient assessment of supply
and demand balances at many locations simultaneously. This
information could help them improve the quality of taxi
service.