IDEAS home Printed from https://ideas.repec.org/a/eee/trapol/v145y2024icp247-258.html

The app or the cap? Which fare innovation affects bus ridership?

Author

Listed:
  • Ziedan, Abubakr
  • Hightower, Ashley
  • Lima, Luiz
  • Brakewood, Candace

Abstract

Technology advancements in the last two decades have changed several aspects of public transit service, particularly related to fares. Transit agencies seek to benefit from new technologies to improve the customer experience by launching mobile fare payment applications (“apps”) and adopting more sophisticated fare policies such as fare capping (“caps”). However, there is a limited understanding of the impacts of these two fare innovations on bus ridership. Therefore, this study seeks to quantify the impacts of mobile fare payment applications and fare capping policies (both daily and monthly) on bus ridership. Staggered difference-in-difference techniques were used to evaluate system-level bus ridership for the 50 largest transit agencies in the United States. This approach considers the effect on multiple treated units that adopted apps or caps at different times; it also considers heterogeneity of the treatment effect between treated agencies and over time. The results suggest that the launch of mobile fare payment applications and the adoption of daily fare capping policies did not have significant impacts on system-level ridership. On the other hand, monthly fare capping policies were associated with significant ridership gains. Transit systems that adopted monthly fare capping policies for more than one year experienced an average increase in annual bus ridership ranging from 3.6% to 4.1%; these results were heterogenous and increased over time. These findings can help to inform transit agencies across the United States as they consider different strategies to increase ridership and reverse recent bus ridership declines. Perhaps most important, the staggered difference-in-difference methodology used in this study could potentially be applied to evaluate a wide range of transportation technology and policy innovations with staggered (gradual) rollouts.

Suggested Citation

  • Ziedan, Abubakr & Hightower, Ashley & Lima, Luiz & Brakewood, Candace, 2024. "The app or the cap? Which fare innovation affects bus ridership?," Transport Policy, Elsevier, vol. 145(C), pages 247-258.
    • Handle: RePEc:eee:trapol:v:145:y:2024:i:c:p:247-258
    DOI: 10.1016/j.tranpol.2023.10.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0967070X23002822
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tranpol.2023.10.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    2. Douglas, Ian & Tan, David, 2017. "Global airline alliances and profitability: A difference-in-difference analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 432-443.
    3. Erhardt, Gregory D. & Hoque, Jawad Mahmud & Goyal, Vedant & Berrebi, Simon & Brakewood, Candace & Watkins, Kari E., 2022. "Why has public transit ridership declined in the United States?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 161(C), pages 68-87.
    4. Campbell, Kayleigh B. & Brakewood, Candace, 2017. "Sharing riders: How bikesharing impacts bus ridership in New York City," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 264-282.
    5. Alemi, Farzad & Rodier, Caroline & Drake, Christiana, 2018. "Cruising and on-street parking pricing: A difference-in-difference analysis of measured parking search time and distance in San Francisco," Transportation Research Part A: Policy and Practice, Elsevier, vol. 111(C), pages 187-198.
    6. Brakewood, Candace & Ziedan, Abubakr & Hendricks, Sara J. & Barbeau, Sean J. & Joslin, Ann, 2020. "An evaluation of the benefits of mobile fare payment technology from the user and operator perspectives," Transport Policy, Elsevier, vol. 93(C), pages 54-66.
    7. Athey, Susan & Imbens, Guido W., 2022. "Design-based analysis in Difference-In-Differences settings with staggered adoption," Journal of Econometrics, Elsevier, vol. 226(1), pages 62-79.
    8. Apanasevic, Tatjana & Markendahl, Jan, 2018. "The value of mobile ticketing from a public transport perspective," Journal of Payments Strategy & Systems, Henry Stewart Publications, vol. 11(4), pages 292-305, February.
    9. Callaway, Brantly & Sant’Anna, Pedro H.C., 2021. "Difference-in-Differences with multiple time periods," Journal of Econometrics, Elsevier, vol. 225(2), pages 200-230.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Shan & Wu, Jianhong & Jiang, Yonglei & Yang, Xutao, 2024. "Impacts of the sea-rail intermodal transport policy on carbon emission reduction: The China case study," Transport Policy, Elsevier, vol. 158(C), pages 211-223.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ichev, Riste & Valentinčič, Aljoša, 2025. "The effect of impact investing on performance of private firms," Research in International Business and Finance, Elsevier, vol. 73(PA).
    2. Mac Clay, Pablo & Börner, Jan & Sellare, Jorge, 2023. "Institutional and macroeconomic stability mediate the effect of auctions on renewable energy capacity," Energy Policy, Elsevier, vol. 180(C).
    3. Rik Chakraborti & Gavin Roberts, 2023. "How price-gouging regulation undermined COVID-19 mitigation: county-level evidence of unintended consequences," Public Choice, Springer, vol. 196(1), pages 51-83, July.
    4. Xin Nie & Jianxian Wu & Han Wang & Weijuan Li & Chengdao Huang & Lihua Li, 2022. "Contributing to carbon peak: Estimating the causal impact of eco‐industrial parks on low‐carbon development in China," Journal of Industrial Ecology, Yale University, vol. 26(4), pages 1578-1593, August.
    5. Cl'ement de Chaisemartin & Xavier D'Haultf{oe}uille, 2020. "Difference-in-Differences Estimators of Intertemporal Treatment Effects," Papers 2007.04267, arXiv.org, revised May 2026.
    6. Bhattacharjee, Arnab & Aravena, Claudia & Castillo, Natalia & Ehrlich, Marco & Taou, Nadia & Wagner, Thomas, 2022. "Agroforestry Programs in the Colombian Amazon: Selection, Treatment and Exposure Effects on Deforestation," National Institute of Economic and Social Research (NIESR) Discussion Papers 537, National Institute of Economic and Social Research.
    7. Coraggio, Luca & Pagano, Marco & Scognamiglio, Annalisa & Tåg, Joacim, 2025. "JAQ of all trades: Job mismatch, firm productivity and managerial quality," Journal of Financial Economics, Elsevier, vol. 164(C).
    8. Penikas, Henry, 2025. "Limited efficiency of G-SIB capital regulation in curbing brown lending," International Review of Financial Analysis, Elsevier, vol. 105(C).
    9. Jiménez, Bruno & Rendon, Silvio, 2023. "Does employment protection unprotect workers? The labor market effects of job reinstatements in Peru," Labour Economics, Elsevier, vol. 80(C).
    10. Jean-Victor Alipour & Valentin Lindlacher, 2025. "No Surprises, Please: Voting Costs and Electoral Turnout," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 3(1), pages 59-97.
    11. Bhorat, Haroon & Köhler, Timothy, 2025. "The labour market effects of cash transfers to the unemployed: Evidence from South Africa," World Development, Elsevier, vol. 188(C).
    12. Alexander Cuntz & Alessio Muscarnera & Utsav Bahl & Prince C. Oguguo, 2024. "Are the best tunes played on the oldest fiddles? Distribution and digitization of recorded classical music," WIPO Economic Research Working Papers 87, World Intellectual Property Organization - Economics and Statistics Division.
    13. Alexander Karaivanov & Dongwoo Kim & Shih En Lu & Hitoshi Shigeoka, 2022. "COVID-19 vaccination mandates and vaccine uptake," Nature Human Behaviour, Nature, vol. 6(12), pages 1615-1624, December.
    14. Kuo, Pei-Fen & Shen, Chung-Wei & Chiu, Chui-Sheng, 2021. "The impact of large-scale events: A difference-in-difference model for a Pokémon go safari zone event in Tainan and its effect on bikeshare systems," Transportation Research Part A: Policy and Practice, Elsevier, vol. 149(C), pages 283-299.
    15. Sho Miyaji, 2024. "Instrumented Difference-in-Differences with Heterogeneous Treatment Effects," Papers 2405.12083, arXiv.org, revised Feb 2026.
    16. Romain Baeriswyl & Alex Oktay & Marc-Antoine Ramelet, 2023. "Exchange rate shocks and equity prices: the role of currency denomination," Working Papers 2023-05, Swiss National Bank.
    17. Kim, Yoonjung, 2025. "The effects of universal free lunch provision on student achievement: Evidence from South Korea," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    18. Marcus Roller, Daniel Steinberg, 2023. "Differences-in-Differences with multiple Treatments under Control," Diskussionsschriften credresearchpaper41, Universitaet Bern, Departement Volkswirtschaft - CRED.
    19. Natali, Ilaria, 2024. "Economic Opportunity and Opioid Regulation: the Case of Codeine in France," TSE Working Papers 24-1563, Toulouse School of Economics (TSE), revised 10 Jun 2026.
    20. Castelnovo, Paolo & Clò, Stefano & Florio, Massimo, 2023. "A quasi-experimental design to assess the innovative impact of public procurement: An application to the Italian space industry," Technovation, Elsevier, vol. 121(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:trapol:v:145:y:2024:i:c:p:247-258. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30473/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.