The Short-term Impact of Congestion Taxes on Ridesourcing Demand and Traffic Congestion: Evidence from Chicago

5 Jul 2022  ·  Yuan Liang, Bingjie Yu, Xiaojian Zhang, Yi Lu, Linchuan Yang ·

Ridesourcing is popular in many cities. Despite its theoretical benefits, a large body of studies claimed that ridesourcing also brings externalities (e.g., inducing trips and aggravating traffic congestion). Therefore, many cities are planning to or have already enacted policies to regulate its use. However, their effectiveness or their impact on ridesourcing demand and traffic congestion is uncertain. To this end, this study applies difference-in-differences, i.e., a regression-based causal inference approach, to empirically evaluate the effect of the congestion tax policy on ridesourcing demand and traffic congestion in Chicago. It shows that this congestion tax policy significantly curtails overall ridesourcing demand. However, its impact on traffic congestion is marginal. The results are robust to the choice of time windows and data sets, alternative model specifications, and alternative modeling approaches (i.e., regression discontinuity design in time). Moreover, considerable heterogeneity exists. For example, the policy notably reduces ridesourcing demand with short travel distances, whereas such impact is gradually attenuated as the distance increases.

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