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Is Uber a substitute or complement for public transit?

Author

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  • Jonathan D. Hall
  • Craig Palsson
  • Joseph Price

Abstract

How Uber affects public transit ridership is a relevant policy question facing cities worldwide. Theoretically, Uber's effect on transit is ambiguous: while Uber is an alternative mode of travel, it can also increase the reach and flexibility of transit's fixed-route, fixed-schedule service. We use a difference-in-differences design to measure the effect of Uber on public transit ridership. The design exploits variation across U.S. metropolitan areas in both the intensity of Uber penetration (as measured using data from Google Trends) and the timing of Uber entry. We find that Uber is a complement for the average transit agency. This average effect masks considerable heterogeneity, with Uber being more of a complement in larger cities and for smaller transit agencies. Comparing the effect across modes, we find that Uber's impact on bus ridership follows the same pattern as for total ridership, though for rail ridership, it is a complement for larger agencies.

Suggested Citation

  • Jonathan D. Hall & Craig Palsson & Joseph Price, 2017. "Is Uber a substitute or complement for public transit?," Working Papers tecipa-585, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-585
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    File URL: https://www.economics.utoronto.ca/public/workingPapers/tecipa-585.pdf
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    References listed on IDEAS

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    1. Jessica Lynn Peck, 2017. "New York City Drunk Driving After Uber," Working Papers 13, City University of New York Graduate Center, Ph.D. Program in Economics.
    2. Stephens-Davidowitz, Seth, 2014. "The cost of racial animus on a black candidate: Evidence using Google search data," Journal of Public Economics, Elsevier, vol. 118(C), pages 26-40.
    3. Leonardo J. Basso & Hugo E. Silva, 2014. "Efficiency and Substitutability of Transit Subsidies and Other Urban Transport Policies," American Economic Journal: Economic Policy, American Economic Association, vol. 6(4), pages 1-33, November.
    4. Jeffrey L. Hoopes & Daniel H. Reck & Joel Slemrod, 2015. "Taxpayer Search for Information: Implications for Rational Attention," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 177-208, August.
    5. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
    6. Frank Goetzke, 2008. "Network Effects in Public Transit Use: Evidence from a Spatially Autoregressive Mode Choice Model for New York," Urban Studies, Urban Studies Journal Limited, vol. 45(2), pages 407-417, February.
    7. Peter Cohen & Robert Hahn & Jonathan Hall & Steven Levitt & Robert Metcalfe, 2016. "Using Big Data to Estimate Consumer Surplus: The Case of Uber," NBER Working Papers 22627, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Alejandro Tirachini & Andres Gomez-Lobo, 2017. "Estabilidad Macroeconómica y Crecimiento Económico: Mitos y Realidades," Working Papers wp457, University of Chile, Department of Economics.

    More about this item

    Keywords

    public transportation; difference-in-differences;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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