Does ride-sharing substitute for or complement public transit?

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Ride-sharing apps like Uber, Lyft, Grab, and DiDi have become ubiquitous in cities around the world, but have also attracted much backlash from established taxi companies. Despite its adoption worldwide, regulation of ride-sourcing services still varies greatly in different parts of the world, as policymakers struggle to assess its impact on the economy and society with limited information and yet-unidentified risks involved.

One major consideration to improve mobility and sustainability in cities is whether ride-sourcing apps serve as a substitute or complement for public transit. In an ideal situation, ride-sharing could complement transit service and help to reduce private car usage. However, as an alternative travel mode, it may also substitute for the transit.

To understand more about this and the impact upon cities, Hui Kong, Xiaohu Zhang, and Jinhua Zhao from SMART Future Urban Mobility interdisciplinary research group (IRG) and the JTL Urban Mobility Lab at MIT recently conducted a study that investigates the relationship between ride-sharing and public transit using ride-sourcing data. Their findings were published in a research paper, “How does ridesourcing substitute for public transit? A geospatial perspective in Chengdu, China” in the Journal of Transport Geography, along with a visualization of their work. Future Urban Mobility (FM) is an IRG of the Singapore-MIT Alliance for Research and Technology (SMART), MIT’s research enterprise in Singapore.

In the first such study undertaken by any researcher in the world to look into the substitution effect of each individual trip at the disaggregated level, SMART researchers used DiDi data in Chengdu, China, a major urban center with a population of over 16 million people. They developed a three-level structure to recognize the potential substitution or complementary relationship between ride-sharing and public transit, while also investigating the impacts through exploratory spatiotemporal data analysis, and examining the factors influencing the degree of substitution via linear, spatial autoregressive, and zero-inflated beta regression models.

Through this, the researchers found that one-third of DiDi trips potentially substitute for public transit, with a ride-sourcing trip considered potentially a substitute for public transit if the trip can be effectively served by public transit.

The time of the day and the location matter as well. The researchers found that the substitution rate is higher during the daytime (8 a.m. to 6 p.m.) and more significant in the city center. Also, substitution trips appear more in the areas with higher building density and land use mixture. During the day, around 40 percent of DiDi trips have the potential to substitute for public transit, but the researchers found that this substitution rate decreases as the supply of transit decreases.

The researchers also found that the substitution effect is more significant in more developed areas covered by subway lines, while peripheral and suburban areas were dominated by complementary trips. However, they also note that house prices were positively correlated with the substitution rate, highlighting the importance of public transit to less-wealthy populations.   

“High substitution rate implies the necessity of implementing ride-sourcing regulations (e.g., spatial quotas, strategic pricing) or optimizing public transit service (e.g., shorten travel time, lower fee, improve crowdedness) in that area,” says Hui Kong, SMART FM investigator and postdoc at JTL Urban Mobility Lab and MIT Transit Lab. “The lower substitution in suburban areas can highlight areas where the current public transit service is inadequate and would help regulators decide on where to implement new bus or train lines.”

Because ride-sharing substitutes a large proportion of public transit, it also amplifies the issue of digital divide. After all, most of the ride-sourcing services rely on smartphone apps and credit card fare-paying. As a result, the unbanked population and people who do not own a smartphone may not have access to ride-sharing services. Policymakers may have to rethink digitalization efforts.

SMART was established by MIT in partnership with the National Research Foundation of Singapore (NRF) in 2007. SMART is the first entity in the Campus for Research Excellence and Technological Enterprise (CREATE) developed by NRF. SMART serves as an intellectual and innovation hub for research interactions between MIT and Singapore, undertaking cutting-edge research projects in areas of interest to both Singapore and MIT. SMART currently comprises an Innovation Center and five IRGs: Antimicrobial Resistance, Critical Analytics for Manufacturing Personalized-Medicine, Disruptive and Sustainable Technologies for Agricultural Precision, FM, and Low Energy Electronic Systems. SMART research is funded by the NRF under the CREATE program. 

FM harnesses new technological and institutional innovations to create the next generation of urban mobility systems to increase accessibility, equity, safety, and environmental performance for the citizens and businesses of Singapore and other metropolitan areas, worldwide.  

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