Shifting Gears: Heterogenous Effects of Bike-Sharing Platforms on City Bus Ridership Demand

Abstract

The impact of the entry of bike-sharing platforms on public transit demand is open to debate. On one hand, bike-sharing services may function as a first-and last-mile complementary solution. This synergistic attribute enhances transit accessibility. Conversely, bike-sharing services may trigger a substitution effect, displacing public transit usage. This shift is contingent on commuters perceiving bikesharing as a more convenient alternative. This paper examines the complementary and substitution effects of bike-sharing platforms' entry on public transit, with a particular interest in city bus systems and assesses the impact of the bike-sharing platforms on heterogeneous factors such as bike-friendliness, pedestrian-friendliness, transit-friendliness, population, language barriers, working-at-home, transit fares, and taxi fares. In this study, a quasi-experiment is applied, using a fixed-effects formulation of the regression-based difference-indifferences framework to empirically estimate the effect of bike-sharing platforms' entry on city bus systems. Moreover, extensive econometric analyses are conducted to confirm the robustness of the main results. The panel dataset comprises 64 cities in the U.S. spanning 96 months from 2012 to 2019. The findings reveal that the entry of bike-sharing platforms decreases the demand for the city bus by 2.7% on average across cities, suggesting that bike-sharing platforms substitute city bus ridership. The results also suggest that bike-, pedestrian-and transit-friendliness moderate this relationship. The substitution is stronger in cities with subpar transit quality and high car dependency, which have limited first-and last-mile integration. Although bike-sharing substitutes bus ridership, the complementariness is amplified in bike-, transit-and pedestrian-friendly cities. The findings provide guidance to platform owners, operators, and policymakers. Collaborative incentive schemes for complementary ridership should consider economic losses-gains from the entry of platforms. These results can be extended to other micro-mobility modes wherein the impact is varied along the service quality of cities.

Keywords: bike-sharing platforms, public transit, sharing economy, bus ridership, difference-in-differences