Efficiency assessment of taxi operations using data envelopment analysis

Abstract Introduction The economic development, well-being of the population, and environmental protection are all strongly linked to a sustainable transportation network. In this sense, in order to ensure a high level of sustainability, it is crucial to have a comprehensive understanding of this sector. As an integrated element of these transportation systems, the efficiency assessment of taxis’ operations is essential in setting managerial strategies for leveraging the sustainability of taxi system. Methodology This study employs a two-stage bootstrap Data Envelopment Analysis approach to assess the efficiency of taxis’ operations, with a focus on minimizing service time and distance traveled. Additionally, this study innovates on investigating the impact of distinct contextual factors on efficiency scores attained to uncover the determinants of taxi operations’ efficiency. The methodology is validated using real data collected from onboard devices of a fleet operating in a Portuguese city over a one-year period. Results The results obtained show that taxis of the fleet can significantly reduce service time and distance traveled, without affecting output levels. Moreover, the decisive role of the stands where taxis queue on the efficiency of their operation is also verified. Conclusions The findings can support practitioners in reaching a more suitable and efficient allocation of resources, leading to a more sustainable transportation combined with improved business results. Furthermore, this study contributes to the current literature by suggesting recommendations to assist managers and public administrators in defining improvement actions for the taxi sector.