Pricing Strategy of Public and Individual Competition Transportation System

In the inter-city traffic modes, individual traffic (one person per car) and public transport are the most prevailing means of transportation which have access to the same traffic route. The two traffic modes intervene with each other and result in transport bottlenecks frequently. Based on the above practical situation in the urban traffic, this paper develops the model of transport bottlenecks. This essay establishes the generalized travel cost models of these two traffic modes respectively. The essay analyses the balance point between public transport and individual traffic. It deduces and compares the change of traffic flow and travel cost of individual traffic and that of public transport under static and dynamic pricing policies. This paper deepens people’s understanding of the issues on division of competitive system. Based on the analysis, the paper proposes that from the perspective of sustainable development the government should guide passengers to choose the appropriate traffic mode and adopt the policy of dynamic toll to promote the sustainable development in the area.