Abstract In this paper, a bi-level model is proposed, which considers the benefits of taxi driver and passenger. The upper-level model is a bi-objective program. The first objective is to minimize the waiting time of passenger in rush hour. And the second objective is to maximize the income of the driver for one day. The lower-level model is a demand function model, calculating the demand of taxi based on given fleet size and fare. The lower-level model can show the influence of fleet size and fare on the potential demand. At last, the taxi current condition of Dalian city in China is chosen to test the proposed method. The results show that the increase of fleet size can attract potential demand. But the degree of attraction mostly depends on the waiting time of passengers and taxi fare. Furthermore, both fleet size and fare of tax in Dalian are on a low level. It is necessary to increase the fleet size and the fare in the meantime.