Abstract
Bilateral taxi-customer searching and meeting occur anywhere on roads. It could be in residential/ commercial zones or at prescribed taxi stands such as an airport or a railway station. In the searching and meeting, taxi driver considers both the expected searching or waiting time cost and ride revenue, while the customer seeks for a taxi ride to minimize total generalized travel cost. This thesis presents a meaningful matching function to spell out the searching and meeting frictions that arises endogenously as a result of the distinct spatial feature of the area and spot meetings and the customer-taxi decisions. A system of simultaneous equations is then developed based on the survey data on taxi service in urban area of Hong Kong over the last ten years.