The explosive growth of ride-hailing around the world has sparked an important debate about the repercussions this new mobility option is having on cities. Urban planners and policymakers around the world have grappled with how to regulate ride-hailing companies in their jurisdictions. Indeed, several countries have banned ride-hailing while others have heavily regulated it. Of particular interest to urban planners and policy makers is whether ride-hailing technologies increase or decrease public transit ridership. Understanding the degree of complementarity or substitutability between ride-hailing and public transit is important for at least four reasons. First, reductions in transit ridership can potentially generate major budgetary shortfalls for transit authorities. Second, reductions in transit ridership likely have social welfare costs because transit ridership is inefficiently too low. Third, reductions in transit ridership likely increase congestion and pollution. Fourth, changes in transportation technologies, such as steam railways, the automobile, and limited-access highways, have repeatedly reshaped urban spatial structure. However, there remains great uncertainty about how ride-hailing and public transportation are impacting each other.
This project addresses this problem by estimating how the rise of ride-hailing is changing cities and the lives of those living there. I have two specific research objectives:
- Estimate how ride-hailing affects public transit. This question is contentious, with valid theoretical arguments on either side. I will do so by using Uber’s confidential trip data to estimate the effect of new subway stations on Uber ridership. While this is estimating how transit affects Uber, rather than how Uber affects transit, it provides a new approach to answer the question of whether Uber and public transit are complements or substitutes.
- Discover the mechanisms by which public transit and ride-hailing affect each other. This is especially useful because it will help with designing policies to encourage public transit ridership and help with the design of public transit networks.
Furthermore, this project also provides preliminary insight into the impact of another technological innovation within urban transportation: autonomous vehicles. While there is much speculation about how autonomous vehicles may change cities, no empirical estimates exist to date because the technology is so new. However, since the change from taxi to ride-hailing is similar to the change from ride-hailing to autonomous vehicles, in that autonomous vehicles will make transportation more convenient, accessible, and affordable, then these results will inform us about this next technological innovation’s effect on cities and will help cities prepare for the change.
