The congestion costs of Uber and Lyft

Matthew Tarduno

Journal of Urban Economics, 2021, vol. 122, issue C

Abstract: I study the impact of transportation network companies (TNC) on traffic delays using a natural experiment created by the abrupt departure of Uber and Lyft from Austin, Texas. Applying difference in differences and regression discontinuity specifications to high-frequency traffic data, I estimate that Uber and Lyft together decreased daytime traffic speeds in Austin by roughly 2.3%. Using Austin-specific measures of the value of travel time, I translate these slowdowns to estimates of citywide congestion costs that range from $33 to $52 million annually. Back of the envelope calculations imply that these costs are similar in magnitude to the consumer surplus provided by TNCs in Austin. Together these results suggest that while TNCs may impose modest travel time externalities, restricting or taxing TNC activity is unlikely to generate large net welfare gains through reduced congestion.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:122:y:2021:i:c:s0094119020300899

DOI: 10.1016/j.jue.2020.103318

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