Design of a rail transit line for profit maximization in a linear transportation corridor

► Two profit maximization models associated with different transit pricing schemes are proposed for design of a rail transit line in a linear transportation corridor. ► The solution properties of the profit maximization models are explored and compared analytically. ► The indifference condition for the flat and distance-based fare regimes in terms of the operator’s net profit is derived. ► The effects of fare regimes, rail capital cost and urban form on design of a rail transit line are revealed. This paper addresses the design problem of a rail transit line located in a linear urban transportation corridor. The service variables designed are a combination of rail line length, number and locations of stations, headway and fare. Two profit maximization models, which account for the effects of different transit pricing structures (flat and distance-based fare regimes), are proposed. In the proposed models, the effects of passenger demand elasticity and population density along the urban corridor are explicitly considered. The solution properties of the proposed models are explored and compared analytically, and the indifference condition for the two fare regimes in terms of the operator’s net profit is identified. A heuristic solution algorithm to solve the proposed models is presented. Numerical examples are provided to show the effects of the fare regimes, rail capital cost and urban configuration (in terms of urban population distribution and corridor length) on the design of the rail transit line and the profitability of the rail transit operations.