A quadratic programming model for designing and evaluating distance-based and zone fares for urban transit

A microcomputer based system for designing and evaluating distance-based and zone fares for transit properties is described. At the heart of the system is an optimization model that finds the fixed charge, mileage charge, and transfer charge that maximize gross revenue subject to constraints on ridership and the form of the fare equation. A linear approximation to the demand curve at the base case values results in a quadratic programming problem. Three alternative modes of using the model system are demonstrated using selected data from the Chicago Transit Authority. Model extensions and proposed future work are outlined.