The Economic Impacts of Private Ridesharing - Quality of Urban Mobility and Labor Market Effects

Research Partner: Niti Aayog

Cities around the world, especially in developing countries, are grappling with the problem of traffic congestion. A recent study by the Centre for Science and Environment (CSE) reports that Delhi experiences almost twelve hours of ‘peak  hour  traffic’.  Congestion adversely impacts economic activity and worker productivity, air pollution, and fuel costs, rendering it a major scourge of cities worldwide. That  ridesharing  platforms  reduce  congestion  and  improve  quality  of  urban  mobility assumes  that these  platforms  substitute private  car  ownership to  reduce  each  individual’s vehicle  miles  travelled  (VMT)  and  congestion.  However, ridesharing platforms might draw  commuters  from  public  transport and  other high  occupancy shared  mobility  services, thereby,  increasing  VMT  and  congestion. App-based taxi services have proliferated at a rapid pace, yet their impact on the quality of urban mobility remains unclear. Ridesharing services have a theoretically ambiguous impact on mobility: On the one hand, they may reduce private car ownership, improve utilisation, while on the other hand, they may draw commuters from public transport into using these more convenient modes of transport.
To address this lack of  empirical  evidence  on  the  impacts  of ridesharing  platforms  we use  an  exogenous  disruption  of  ridesharing  services  in Delhi to causally estimate the impact of ridesharing platforms on congestion. Our analyses of impact  are informed  by granular  route-level  traffic  data  collected  from  Google  Maps  and complementary ridership  data  from  the  Delhi  Metro  Rail  Corporation  (DMRC)  and  other transport services.