The Impact of Ridesharing Services on Congestion: Evidence from Indian Cities

Abstract

Early research has documented significant growth in ride-hailing services worldwide and allied benefits. However, growing evidence of their negative externalities are leading policymakers to adopt a more conservative stance. Despite demonstrated socioeconomic benefits and consumer surplus worth billions of dollars, cities are choosing to curb these services in a bid to mitigate first order urban mobility problems. To inform these decisions, we study how the absence of ride-hailing services affects congestion levels in three major Indian cities. Using rich real-time traffic and route trajectory data from Google Maps, we show that in all the three cities, periods of ride-hailing unavailability see a discernible drop in travel time. The effects are largest for the most congested regions during the busiest hours, which see 10.1 - 14.8 percent reduction in travel times. Additionally, we provide suggestive evidence for some of the mechanisms behind the observed effects, including deadheading, substitution with public transit and inducing people to drive longer routes that avoid congested segments. These results suggest that despite their paltry modal share, ride-hailing vehicles are contributing significantly to congestion in the cities studied, and quantify the maximum travel time gains that can be expected on curbing them.