The impact of ride-hailing regulations on traffic congestion: Evidence from China

Despite theoretical controversies, many city governments have begun to regulate ride-hailing services in response to concerns that their rapid growth could worsen traffic congestion. However, the precise impact of these regulatory measures on traffic congestion remains unclear. To address this research gap, we utilized a quasi-natural experiment involving the phased implementation of regulatory policies restricting the supply of ride-hailing services in various cities across China to identify the causal effect of ride-hailing regulations on traffic congestion. Using monthly panel data from 98 Chinese cities, our difference-in-differences estimation shows that the congestion delay index decreased by an average of 2.4% after the implementation of ride-hailing regulations. This finding remains consistent and robust across a series of robustness checks. Furthermore, our heterogeneity analysis indicates that the congestion mitigation effect of ride-hailing regulations varies depending on the types and intensities of regulations implemented, and that this effect is stronger in central cities with larger populations, more developed public transportation systems, and higher levels of congestion.