Abstract:In recent years, the market share of cruising taxi has been gradually eroded by ride-hailing services, which posesa risk that cruising taxi services may be driven out of the taxi market. To cope with the risk and promote the integration of cruising taxis and ride-hailing, adjusting the price of cruising taxis is an effective way. Considering the competition from ride-hailing and the difference in the travel cost of long-and short-distance passengers, this paper analyzes the travel choice behavior of these two types of passengers based on the probability selection model. It then builds a Stackelberg game model to analyze the cruising taxi pricing problem in a competitive environment and derives the equilibrium state of the taxi market. The results show that: 1) when the flat fee per ride and unit mileage fare of the cruising taxi are relatively low, the development of cruising taxi and the ride-hailing can be integrated; 2) In order to avoid being driven out of the market, the cruising taxi service should set a lower flat fee and unit mileage fare so that the cruising taxi service and the ride-hailing service can reach equilibrium for both short and long-distance competition; 3) In the equilibrium market, an increase in passenger preference leads to higher revenue for both ride-hailing and cruising taxi services.Furthermore,when passenger preference reaches a higher level, enhancing the passenger preference leads to a higher passenger surplus.