The Impact of Ride-hailing Services on Congestion: Evidence from Indian Cities
42 Pages Posted: 28 Jun 2019 Last revised: 21 Apr 2020
Date Written: June 24, 2019
The impact of ride-hailing services on urban congestion has been difficult to disentangle due to shortage of data as well as an appropriate empirical setting. Due to these limitations, prior work has relied largely on self-reported surveys or simulated counterfactual models. We overcome the first limitation by using granular, high-frequency traffic data from Google Maps. Strikes by drivers of ride-hailing platforms in three major Indian cities (Mumbai, New Delhi and Bangalore) provide the exogenous variation needed to identify the causal effect of interest. For each city, in the days immediately following a citywide strike of drivers of dominant ride-hailing platforms, we find a systematic and persistent decrease in congestion levels. The magnitude of decrease is about 40 - 53 percent of the reduction seen during a typical holiday. The effects are largest for the most congested routes during peak hours, which are likely to see the highest activity of ride-hailing services on a usual day. We also find evidence of substitution with other mass transit services during the period of disruption. The results suggest that at least in the cities studied, ride-hailing platforms may be drawing commuters from public transit and increasing congestion.
Keywords: Uber, Ola, Ridehailing, Ridesharing, Ridesourcing, Urban Transportation, Congestion, Sharing Economy, Traffic, Externality
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