Exploring Observed and Unobserved Preference Heterogeneity in Choice Behavior of Demand Responsive Customized Bus Service

The users' taste preferences for the demand responsive customized bus (DRCB) and, in particular, the its mechanism of heterogeneity, which determine routing, timetabling, and even launch and cancellation of the DRCB service, have not been given enough attention. Using a stated preference experiment in the context of mode choice between DRCB and a conventional bus conducted in Dalian, China, this study investigated observed and unobserved heterogeneity in sampled commuters' taste preferences within a mixed multinomial logit model. In addition to unobserved between-individual heterogeneity in time-related preferences, the model identified gender and mode-specific differences associated with fare. A fourfold pattern of fare sensitivity was revealed, which offers useful information for pricing decisions. The model outcomes of this study, along with the market performance the empirical case, suggest that, for specific urban settings, DRCB has great potential to draw commuters from their private cars, by delivering personalized, comfortable, and affordable services.