The past decade has witnessed an increased application for dynamic pricing in transportation industry, where firms use various forms of dynamic pricing to respond to market fluctuations and uncertainty in demand. In light of the success in the airline dynamic pricing practice and given the advancement of the ICT technology, the question is raised as follows: can technology adoptions, such as smart card, help the transportation companies, especially public transport operators, to approach the dynamic pricing in an innovative way? By using the case of the smart card adoption in the Dutch transportation industry, this article articulates the opportunities the smart card brings to the dynamic pricing design and use. It is demonstrated that the smart card data gives a dimensional view on the travellers, where both the market segmentation and the travel behaviour could be better studied. It is also argued that the rich segmentation information on the travellers and the increased understanding of the travel behaviour could lead to the level of refinement of the dynamic pricing strategies for the transportation companies. Furthermore, a number of dynamic pricing strategies are proposed that correspond to the discussed smart card dimensions.
Li, Ting; van Heck, Eric; and Vervest, Peter, "How Smart Card Technology Could Be Used for Dynamic Pricing in Transportation Network?" (2005). ICEB 2005 Proceedings. 38.