The effect of ride‐hailing services on public transit usage in China's small‐ and medium‐sized cities: A synthetic control method analysis

Abstract With the recent advances in smartphones and Internet technologies, ride‐hailing services (such as Uber and Didi) have emerged and changed the travel modes that residents use. An important issue within this area is how ride‐hailing services influence public transit usage. The majority of the research regarding this topic has focused on situations in large cities and has not reached a unanimous consensus among scholars. In particular, the role of ride‐hailing services in small‐ and medium‐sized cities may be different from the role of these services in large cities. In this paper, we choose 22 small‐ and medium‐sized cities in China as samples with a research time window spanning from 2011 to 2016 to examine the impact of the introduction of ride‐hailing services on public transit usage. The results of the synthetic control method, as well as other robustness checks, show that (1) the introduction of ride‐hailing services to China's small‐ and medium‐sized cities significantly increases public transit usage; (2) the effect of the introduction of ride‐hailing services on public transit usage in small‐ and medium‐sized cities is “proactive” for approximately 1 year; and (3) the positive effect of ride‐hailing services on public transit usage in small‐ and medium‐sized cities weakens over time. This study enriches the literature on the impact of ride‐hailing services on the urban transportation system by specifically taking small‐ and medium‐sized cities as the research scope. The above findings are of great significance to the urban transport department's formulation of ride‐hailing policies and the operation layout of public transit operators in small‐ and medium‐sized cities.