Beyond solving the last mile problem: the substitution effects of bike-sharing on a ride-sharing platform

Ride-sharing services have been popularly used for both short-distance and long-distance trips. The recent introduction and growth of bike-sharing services can help solve the last mile problem and provide a good mobility option, especially for short-distance travellers. We examine the extent to which bike-sharing platforms solve the last mile problem and affect short-distance travels by studying their impacts on ride-sharing orders. To do so, we exploit a natural experiment setting in which bike-sharing platforms were newly launched in Chengdu, China. We combine detailed granular one-month order data collected from DiDi with Chengdu’s geographic information data from Gaode Map, a Chinese leading map provider. We find that the introduction of bike-sharing platforms significantly reduces short-distance ride-sharing orders. We additionally examine the heterogeneity in substitution effects across different pickup and drop-off locations and find that location attributes significantly affect bike-sharing’s substitution effects on ride-sharing platforms.