Examining the Heterogeneous Impact of Ridehailing Services on Public Transit Use

Abstract

We examine the impact that ride-hailing services have had on the demand for different modes of public transit in the United States, with a particular focus on understanding heterogeneity in the effects. We assess these effects using a panel dataset that combines information on public transit utilization (from the Federal Transit Administration) with information on ride-hailing providers’ staggered arrival into different locations, based on public press-releases and newspaper reports. Our analysis indicates that, on average, ride-hailing services have led to significant reductions in the utilization of city bus services, while increasing utilization of commuter rail services. These average effects are also subject to a great deal of contextual heterogeneity, depending on the size of the local population, rates of violent crime, weather, gas prices, transit riders’ average trip distance and the quality of overall quality of public transit options. We demonstrate the robustness of our findings to alternative model specifications. Our findings contribute to the prior literature on technology substitution and complementarity and suggest explanations for contradictory findings that have been reported on ride-hailing’s influence upon public transit demand. We also offer useful insights for policymakers, highlighting the nuanced implications of ride-hailing services for different transit operators, depending on the local context.

Keywords: Uber, Lyft, Public Transit, Difference in Differences, Ride-hailing, Transportation

JEL Classification: O33, O51, P25, C23, C40