Do Ride-Sharing Services A ffect Traffic Congestion? An Empirical Study of Uber Entry

29 Pages Posted: 14 Sep 2016  

Ziru Li

Arizona State University (ASU)

Yili Hong

Arizona State University (ASU) - W.P. Carey School of Business

Zhongju Zhang

Arizona State University (ASU) - Department of Information Systems

Date Written: August 30, 2016

Abstract

Sharing economy platform, which leverages information technology (IT) to re-distribute unused or underutilized assets to people who are willing to pay for the services, has received tremendous attention in the last few years. Its creative business models have disrupted many traditional industries (e.g., transportation, hotel) by fundamentally changing the mechanism to match demand with supply in real time. In this research, we investigate how Uber, a peer-to-peer mobile ride-sharing platform, affects traffic congestion and environment (carbon emissions) in the urban areas of the United States. Leveraging a unique data set combining data from Uber and the Urban Mobility Report, we examine whether the entry of Uber car services affects traffic congestion using a difference-in-difference framework. Our findings provide empirical evidence that ride-sharing services such as Uber significantly decrease the traffic congestion after entering an urban area. We perform further analysis including the use of instrumental variables, alternative measures, a relative time model using more granular data to assess the robustness of the results. A few plausible underlining mechanisms are discussed to help explain our findings.

Keywords: Sharing Economy, Ride-Sharing Services, Digital Platforms, Traffic Congestion

Suggested Citation

Li, Ziru and Hong, Yili and Zhang, Zhongju, Do Ride-Sharing Services A ffect Traffic Congestion? An Empirical Study of Uber Entry (August 30, 2016). Available at SSRN: https://ssrn.com/abstract=2838043 or http://dx.doi.org/10.2139/ssrn.2838043

Ziru Li

Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Yili Hong (Contact Author)

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://my.wpcarey.asu.edu/directory/people/profile.cfm?person=2255148

Zhongju Zhang

Arizona State University (ASU) - Department of Information Systems ( email )

400 E Lemon St
Tempe, AZ AZ 85287
United States

HOME PAGE: http://https://apps.wpcarey.asu.edu/directory/people/profile.cfm?person=2259040

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