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On the Effects of the Availability of Means of Payments: The Case of Uber

Author

Listed:
  • Fernando E. Alvarez

    (University of Chicago - Department of Economics; NBER)

  • David O. Argente

    (Pennsylvania State University - Department of Economics)

Abstract

We use three quasi-natural experiments in Mexico and one in Panama to estimate the effects of having the option to pay with cash on Uber rides. The ability to pay in cash affects the demand for rides, which is reflected in large changes in the total number of trips, fares, miles, and number of users after Uber introduced cash payments, particularly in lower-income city blocks. On the other hand, the effects on prices, estimated times of arrival, and competitor pricing are negligible, consistent with the supply of trips being very elastic. Although cash payments naturally increase the fraction of users that pay exclusively with cash, more than half of the users have access to both cards and cash, and alternate between payment methods. We find evidence consistent with cash and card payments being imperfectly substitutable at both the intensive and extensive margins, which magnifies the impact of policies that restrict the availability of payment methods.

Suggested Citation

  • Fernando E. Alvarez & David O. Argente, 2020. "On the Effects of the Availability of Means of Payments: The Case of Uber," Working Papers 2020-173, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2020-173
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    File URL: https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_2020173.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Lucas A. Mariani & Jose Renato Haas Ornelas & Bernardo Ricca, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," Working Papers Series 576, Central Bank of Brazil, Research Department.
    2. Beknazar-Yuzbashev, George & Jiménez Durán, Rafael & McCrosky, Jesse & Stalinski, Mateusz, 2025. "Toxic content and user engagement on social media: Evidence from a field experiment," Working Papers 359, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    3. Campigotto, Nicola & Catola, Marco & D’Alessandro, Simone & Guarnieri, Pietro & Spadoni, Lorenzo, 2025. "Curbing energy consumption through voluntary quotas: Experimental evidence," Energy Economics, Elsevier, vol. 150(C).
    4. Balbuzanov, Ivan & Gars, Jared & Stalinski, Mateusz & Tjernström, Emilia, 2025. "Incentivizing Engagement: Experimental Evidence on Journalist Performance Pay," CAGE Online Working Paper Series 763, Competitive Advantage in the Global Economy (CAGE).
    5. Beknazar-Yuzbashev, George & Jiménez-Durán, Rafael & McCrosky, Jesse & Stalinski, Mateusz, 2025. "Toxic Content and User Engagement on Social Media: Evidence from a Field Experiment," CAGE Online Working Paper Series 741, Competitive Advantage in the Global Economy (CAGE).
    6. Thomas Elston & Germà Bel & Han Wang, 2025. "The effect of inter‐municipal cooperation on social assistance programs: Evidence from housing allowances in England," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 44(3), pages 1060-1088, June.
    7. Balbuzanov, Ivan & Gars, Jared & Stalinski, Mateusz & Tjernstrom, Emilia, 2025. "Incentivizing Engagement : Experimental Evidence on Journalist Performance Pay," The Warwick Economics Research Paper Series (TWERPS) 1570, University of Warwick, Department of Economics.
    8. Christensen, Peter & Osman, Adam, 2021. "The Demand for Mobility: Evidence from an Experiment with Uber Riders," IZA Discussion Papers 14179, IZA Network @ LISER.
    9. Berg, Tobias & Burg, Valentin & Keil, Jan & Puri, Manju, 2025. "The economics of “Buy Now, Pay Later”: A merchant’s perspective," Journal of Financial Economics, Elsevier, vol. 171(C).
    10. Raphael Auer & Giulio Cornelli & Jon Frost, 2022. "The pandemic, cash and retail payment behaviour: insights from the future of payments database," BIS Working Papers 1055, Bank for International Settlements.
    11. Fernando E. Alvarez & David Argente & Diana Van Patten, 2022. "Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador," NBER Working Papers 29968, National Bureau of Economic Research, Inc.
    12. Brendon McConnell, 2023. "What's Logs Got to do With it: On the Perils of log Dependent Variables and Difference-in-Differences," Papers 2308.00167, arXiv.org, revised Aug 2023.
    13. Beknazar-Yuzbashev, George & Jiménez-Durán, Rafael & McCrosky, Jesse & Stalinski, Mateusz, 2025. "Toxic Content and User Engagement on Social Media : Evidence from a Field Experiment," The Warwick Economics Research Paper Series (TWERPS) 1543, University of Warwick, Department of Economics.
    14. Alvarez, Fernando & Argente, David & Jimenez, Rafael & Lippi, Francesco, 2022. "Cash: A Blessing or a curse?," Journal of Monetary Economics, Elsevier, vol. 125(C), pages 85-128.
    15. Mariani, Lucas A. & Haas Ornelas, José Renato & Ricca, Bernardo, 2023. "Banks’ Physical Footprint and Financial Technology Adoption," IDB Publications (Working Papers) 12812, Inter-American Development Bank.
    16. George Beknazar-Yuzbashev & Rafael Jiménez-Durán & Jesse McCrosky & Mateusz Stalinski, 2025. "Toxic Content and User Engagement on Social Media: Evidence from a Field Experiment," CESifo Working Paper Series 11644, CESifo.

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    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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