The Impact of Ride-hailing Services on Congestion: Evidence from Indian Cities

59 Pages Posted: 28 Jun 2019 Last revised: 8 Sep 2020

See all articles by Saharsh Agarwal

Saharsh Agarwal

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Deepa Mani

Indian School of Business (ISB), Hyderabad

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: June 24, 2019

Abstract

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

Agarwal, Saharsh and Mani, Deepa and Telang, Rahul, The Impact of Ride-hailing Services on Congestion: Evidence from Indian Cities (June 24, 2019). Indian School of Business, Available at SSRN: https://ssrn.com/abstract=3410623 or http://dx.doi.org/10.2139/ssrn.3410623

Saharsh Agarwal (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
+14127088563 (Phone)

Deepa Mani

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Rahul Telang

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

4800 Forbes Ave
Pittsburgh, PA 15213-3890
United States
412-268-1155 (Phone)

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