The complementary effect of ride-sharing on public transit: evidence from a natural experiment

Purpose Identifying the complementary effects of ride-sharing on public transit is critical to understanding the potential value of growing partnerships between public transit agencies and ride-sharing platforms. The purpose of this paper is to investigate whether and how ride-sharing services complement public transit. Design/methodology/approach Taking advantage of a natural experiment whereby subway Line 2 opened after the entry of ride-sharing services in Xiamen, this study uses a difference-in-differences approach to identify the complementary effects of ride-sharing on public transit based on a proprietary fine-grained trip-level data set from a large ride-sharing platform. Findings This study obtained the encouraging finding that ride-sharing has a significant complementary effect on the subway, as the number of ride-sharing pickups and drop-offs at subway stations increased by 130% and 117.9%, respectively, after the subway opening. Moreover, mechanism analysis shows that the complementary effect of ride-sharing services is stronger when connection distance is short (i.e. under 6 km) and when the transportation availability is limited (i.e. at night or in the areas with low transit supply and low population density). Practical implications The findings provide guidelines for promoting cooperation between public transit agencies and ride-sharing platforms to build an efficient and sustainable urban transport system. Originality/value This study is the first to examine the complementary effect of ride-sharing services on public transit via unique fine-grained ride-sharing trips data, and further reveal the underlying mechanism behind this effect.