On the Effects of the Availability of Means of Payments: The Case of Uber

Fernando E. Alvarez and David Argente

No 28145, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use three quasi-natural experiments in Mexico and one in Panama to estimate the effects of having the option to pay with cash on Uber rides. The ability to pay in cash affects the demand for rides, which is reflected in large changes in the total number of trips, fares, miles, and number of users after Uber introduced cash payments, particularly in lower-income city blocks. On the other hand, the effects on prices, estimated times of arrival, and competitor pricing are negligible, consistent with the supply of trips being very elastic. Although cash payments naturally increase the fraction of users that pay exclusively with cash, more than half of the users have access to both cards and cash, and alternate between payment methods. We find evidence consistent with cash and card payments being imperfectly substitutable at both the intensive and extensive margins, which magnifies the impact of policies that restrict the availability of payment methods.

JEL-codes: E41 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-mac, nep-pay, nep-tre and nep-ure
Note: EFG ME PE
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Citations: View citations in EconPapers (4)

Published as Fernando Alvarez & David Argente, 2022. "On the Effects of the Availability of Means of Payments: The Case of Uber," The Quarterly Journal of Economics, vol 137(3), pages 1737-1789.

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Journal Article: On the Effects of the Availability of Means of Payments: The Case of Uber (2022)
Working Paper: On the Effects of the Availability of Means of Payments: The Case of Uber (2020)
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