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Is Uber a substitute or complement for public transit?

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  • Jonathan D. Hall
  • Craig Palsson
  • Joseph Price

Abstract

How Uber affects public transit ridership is a relevant policy question facing cities worldwide. Theoretically, Uber's effect on transit is ambiguous: while Uber is an alternative mode of travel, it can also increase the reach and flexibility of transit's fixed-route, fixed-schedule service. We use a difference-in-differences design to measure the effect of Uber on public transit ridership. The design exploits variation across U.S. metropolitan areas in both the intensity of Uber penetration (as measured using data from Google Trends) and the timing of Uber entry. We find that Uber is a complement for the average transit agency. This average effect masks considerable heterogeneity, with Uber being more of a complement in larger cities and for smaller transit agencies. Comparing the effect across modes, we find that Uber's impact on bus ridership follows the same pattern as for total ridership, though for rail ridership, it is a complement for larger agencies.

Suggested Citation

  • Jonathan D. Hall & Craig Palsson & Joseph Price, 2017. "Is Uber a substitute or complement for public transit?," Working Papers tecipa-585, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-585
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    References listed on IDEAS

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    More about this item

    Keywords

    public transportation; difference-in-differences;

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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