The Second Avenue Subway's Effect on Ride-Hail, Rideshare, and Taxi Usage in New York City

84 Pages Posted: 16 Dec 2018 Last revised: 20 Jan 2019

Date Written: January 19, 2019

Abstract

On August 14, 2018, New York City Council passed the “Uber cap,” a cap on the number of vehicles permitted to drive for ride-hail. They did so with the stated goal of reducing ride-hail and rideshare (collectively “ride-sourcing”) trips to reduce traffic congestion. Opponents argued that the cap was misguided, because it did nothing to address the source of the growing demand for ride-sourcing: an inconvenient and unreliable subway system. However, this counterargument relies on the assumption that there would be significant substitution away from these car services if the subway system was improved. Past literature on ride-sourcing demand does not address this claim and past literature on taxi demand, which is often assumed to be a good proxy for ride-sourcing demand, does not support it.

As such, I measure the substitution away from ride-hail and rideshare caused by an increase in access to the subway system: the opening of the three new Second Avenue Subway (SAS) stations in New York City on January 1, 2017. Using data on daily volume of pick-ups in the four taxi zones around the new stations in a differences-in-differences analysis, I find the SAS caused a decrease of between 200-275 ride-hail and between 110-150 daily total rideshare pick-ups per taxi zone near the new stations, which could suggest that passengers would substitute away from these car services if the subway was improved. I do not find a significant impact on yellow taxi daily total pick-ups, which suggests caution when extrapolating past taxi findings to ride-sourcing. Additionally, looking at only the daily pick-ups in the AM and PM rush hours, I find the SAS caused a decrease of ride-hail and rideshare pick-ups in both times but only decreased yellow taxi PM rush pick-ups.

Keywords: ride-hail, rideshare, transportation network company, taxi, public transportation, subway, Second Avenue Subway, transportation mode choice, quasi-experiment

JEL Classification: D12, L91, R4, R41

Suggested Citation

Bhatia, Natasha, The Second Avenue Subway's Effect on Ride-Hail, Rideshare, and Taxi Usage in New York City (January 19, 2019). Available at SSRN: https://ssrn.com/abstract=3258592 or http://dx.doi.org/10.2139/ssrn.3258592

Natasha Bhatia (Contact Author)

Northwestern University, Kellogg School of Management, Department of Marketing ( email )

2001 Sheridan Rd.
Evanston, IL 60208
United States

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