Customer Preference and Station Network in the London Bike Share System

47 Pages Posted: 12 Feb 2018 Last revised: 11 May 2019

See all articles by Pu He

Pu He

Columbia University - Columbia Business School

Fanyin Zheng

Columbia University - Columbia Business School

Elena Belavina

Cornell SC Johnson College of Business

Karan Girotra

Cornell Tech; Cornell SC Johnson College of Business

Date Written: February 1, 2018

Abstract

We study customer preference for the bike share system in the city of London. We estimate a structural demand model on the station network to learn the preference parameters and use the estimated model to provide insights on the design and expansion of the bike share system. We highlight the importance of network effects in understanding customer demand and evaluating expansion strategies of transportation networks. In the particular example of the London bike share system, we show that the currently implemented station density rule is far from ideal. We develop a new method to deal with the endogeneity problem of the choice set in estimating demand for network products. Our method can be applied to other settings, in which the available set of products or services depends on demand.

Suggested Citation

He, Pu and Zheng, Fanyin and Belavina, Elena and Girotra, Karan, Customer Preference and Station Network in the London Bike Share System (February 1, 2018). Columbia Business School Research Paper No. 18-20. Available at SSRN: https://ssrn.com/abstract=3121791 or http://dx.doi.org/10.2139/ssrn.3121791

Pu He

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Fanyin Zheng (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

HOME PAGE: http://www.fanyinzheng.com

Elena Belavina

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

Karan Girotra

Cornell Tech ( email )

111 8th Avenue #302
New York, NY 10011
United States

HOME PAGE: http://www.girotra.com

Cornell SC Johnson College of Business ( email )

Ithaca, NY 14850
United States

HOME PAGE: http://www.girotra.com

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