Is Uber Helping or Hurting Mass Transit? An Empirical Investigation

Abstract

Sharing economy reshapes the distribution of unused or underutilized asset through digital platforms to individuals who are willing to pay for the services. The new economy model has introduced dramatic impact on the traditional industries by matching the demand and supply in real time. In this paper, we examine how the entry of Uber, a ride-sharing services digital platform, influences the demand of public transportation. Significant debate has surrounded whether the new ride-sharing model siphoned riders from public transit, or made transit feasible for more riders. However, limited empirical research has been done to uncover whether Uber is helping or hurting public transportation systems. Leveraging a natural experiment setting, the entry of Uber, with a difference-in-differences approach, we find a significant drop in the number of passenger trips with bus. Further, our results suggest that the effect of Uber is not uniform – the reduction in bus passenger trips is mitigated when the proportion of old age people in a local urban area is large; the decrease is amplified when the populations of disable people, including with language difficulty, and self-employed people are large. However, the moderating effect of poverty is mixed. We discuss the implications for research and practice.