Impact of Ride-Hailing Services on Transportation Mode Choices: Evidence from Traffic and Transit Ridership

Abstract

The rise of technology-enabled ride-hailing services has affected individuals’ transportation-related decisions. The impact of these ride-hailing services likely varies across traveler segments that differ in their usage of various modes of transportation. In this paper, we develop and leverage a framework that allows us to examine the impact of ride-hailing services on the transportation mode choice for three traveler segments: drivers (who primarily use a personal automobile to travel), riders (who primarily use public transit to travel), and walkers (who primarily use non-motorized modes of transport). We first develop a framework outlining how the behavior of different traveler segments would be impacted by the introduction of ride-hailing services and show how this affects traffic congestion and public transportation ridership. To test the framework, we compiled a rich dataset, combining data on public transportation ridership, traffic congestion, and individual transportation mode choice. Employing a difference-in-differences methodology, we show that the Uber entry in a market enabled those who were walkers and riders prior to the entry of Uber to travel more conveniently, leading to an increase in traffic congestion, and induced those who were drivers to substitute their use of private automobiles with a combination of Uber and public transit. We introduced urban compactness to assess the heterogeneous impact of ride-hailing services for cities that differ in their distribution of traveler segments. We found that Uber entry increases traffic congestion and reduces public transit demand more in cities with higher levels of urban compactness, i.e., where the proportion of riders and walkers is higher than that of drivers. This work provides a holistic framework to understand the mechanism underlying the impact of ride-hailing services on public transit and traffic congestion. Urban planners and policy makers can leverage our framework, methodology, and empirical results to guide city planning decisions that have implications for sustainability.