Taxing Uber

David Agrawal and Weihua Zhao

Journal of Public Economics, 2023, vol. 221, issue C

Abstract: Ride-hailing applications create new challenges for governments providing transit services, but also create new opportunities to raise tax revenue. To shed light on the effect of taxing or subsidizing ride-hailing services, we extend a pseudo-monocentric city model to include multiple endogenously chosen transportation modes, including ride-hailing applications and endogenous car ownership. We show that most tax and spending programs that cities have currently adopted mildly increase public transit usage. However, the model predicts more significant increases in public transit ridership when ride-hailing applications are subsidized as a “last-mile” provider. Our model indicates that whether ride-hailing services and public transit are substitutes or complements is a policy choice.

Keywords: Ride-hailing; Taxation; Public transit; Traffic congestion; Optimal tolls (search for similar items in EconPapers)
JEL-codes: C60 H25 H71 L88 L98 R41 R51 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:221:y:2023:i:c:s0047272723000440

DOI: 10.1016/j.jpubeco.2023.104862

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