The Impact of Ride-hailing Services on Congestion: Evidence from Indian Cities
59 Pages Posted: 28 Jun 2019 Last revised: 8 Sep 2020
Date Written: June 24, 2019
The impact of ride-hailing services on urban congestion has been difficult to disentangle due to a shortage of data and an appropriate empirical setting. Despite the preponderance of studies examining various aspects of their impact on urban mobility, such as relationship with public transit and demand for car ownership, a reliable assessment of the direction and magnitude of their net congestion externality remains elusive. We report findings from three major Indian cities (Mumbai, New Delhi and Bangalore) which are among the most congested in the world, yet remain understudied. To overcome the data limitation, we use granular, high-frequency traffic data from Google Maps. Strikes by drivers of ride-hailing platforms provide the exogenous variation needed to identify the causal effect of interest. For each city, in the days immediately following a citywide strike of ride-hailing drivers, we find a systematic and persistent decrease in congestion levels. The effects are largest for the most congested regions during the busiest hours, which see 32 - 41 percent of the effect seen on the largest holidays. The results suggest that despite their paltry modal share, ride-hailing services are contributing significantly to congestion, and call for regulatory interventions to facilitate the use of these services in a sustainable way.
Keywords: Uber, Ola, Ridehailing, Externality, Ridesharing, Ridesourcing, Urban Transportation, Congestion, Sharing Economy, Traffic, Externality
Suggested Citation: Suggested Citation