Effect of Price and Time on Private and Shared Transportation Network Company Trips

Abstract

Transportation network companies (TNCs) offer two types of service: private-party ridehailing and shared ridehailing. Policymakers have an interest in encouraging shared over private ridehailing to promote more efficient use of the transportation network. While transportation researchers have analyzed ridehailing behavior before, there is limited literature describing the effect of price and time on a rider’s choice between private-party and shared ridehailing. This paper fills this gap by analyzing revealed preferences for private-party and shared ridehailing trips in 15 American cities coupled with a survey of 4,365 users of a large TNC that includes stated preference questions focused on various alternative options for their most recent trip choice. This study finds that an increase in the relative price difference of $1 per mile increases an individual’s probability of sharing by over 8%, while a decrease in the relative travel time difference of 1 min per mile increases the probability of sharing by over 33%. The survey results also show that that a sizable proportion of private-party TNC trips (approximately 35%) will be difficult or even impossible to convert to shared rides through a price-based incentive. Market segmentation analysis reveals user and trip types where price- and time-based incentives have a relatively greater effect on the choice between private and shared rides. Finally, heterogeneity in user time versus money trade-offs suggests new product possibilities that would increase TNC sharing.