Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2021:18: Do ride-hailing services worsen freeway congestion and air quality? Evidence from Uber's entry in California

Chandra Kiran B. Krishnamurthy () and Nicole Ngo ()
Additional contact information
Chandra Kiran B. Krishnamurthy: CERE - Center for Environmental and Resource Economics (CERE), Department of Forest Economics, Swedish University of Agricultural Sciences, SLU, Umeå, Sweden
Nicole Ngo: School of Planning, Public Policy, and Management, University of Oregon

Abstract: We investigate the effects of Uber’s entry on freeway traffic and pollution in California. We use a panel difference-in-differences design and exploit variation in timing and occurrence of Uber’s entry into different counties using hourly freeway traffic data and daily pollution data between 2009 and 2017. We find reductions in weekday freeway congestion and PM2.5 concentrations in the average county entered. However, this reduction occurs at off-peak times and in less populated counties. During evening rush hour and in the most populated counties, we find increases in congestion and air pollution. We estimate that Uber’s entry resulted in an overall net social cost between $1.4 and $13.9 million for counties where and time periods when congestion is greatest.

Keywords: Air Pollution; Traffic Congestion; ride-hailing; ridesharing

JEL-codes: C21; C23; L91; R41

Language: English

87 pages, First version: January 31, 2022. Revised: October 9, 2023. Earlier revisions: October 3, 2023.

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