Ridesharing and the Use of Public Transportation

Abstract

We investigate the relationship between on-demand ridesharing via platforms like Uber and Lyft and the use of public transit systems. Our study uses trip count data on ridesharing, taxi, shared bike, and subway usage in New York City. Exploiting a series of exogenous shocks to the system — the closing of subway stations — to isolate substitution effects, we find that the average shock is associated with a 2.8 – 3.3% increase in the use of ridesharing. This suggests that on-demand ridesharing acts as infrastructure that helps smooth unexpected transportation supply and demand surges. On average, the effect is small relative to the estimated number of subway rides displaced per zone and four-hour period, but we estimate that ridesharing plays a more important role in the outer boroughs, where the alternative substitutes (e.g., other subway lines, or taxis) are not as readily available. We also explore the effects of other sources of heterogeneity across the city. We hope to lay a data-driven foundation to better understand how the sharing economy substitutes and complements existing and future capital-intensive transit systems.

Keywords: Business analytics, sharing economy, ridesharing, transportation, difference-in-differences