Ride-Sharing Apps and Reallocation of Motorpark: Evidence from Colombia

Abstract

Ridesharing services have rapidly expanded in Latin America, unleashing protests and incumbent's disapproval. Understanding the net effects derived form these services is key for policy makers and the current discussion on technology and regulation. Existing literature has traditionally focused on the case of developed countries and general benefits from the user perspective. However, ridesharing services have also become a financial alternative for acquiring new vehicles in developing countries, thus having effects on ownership and motorization rates in urban areas. We estimate the effect of Uber on motorpark reallocation using data from Colombia's National Unified Transportation Registry. We follow a difference-in-difference approach with Uber-operating municipalities as treatment units and other municipalities as control observations. Estimates show statistically significant increases on registries for small-size cars after Uber entry and declines on new taxi units.