In contrast to claims that ride-hailing services undermine the viability of large-scale public infrastructure investments, ride-hailing services significantly expand people’s ability to make use of mass rapid transit (MRT) systems. This is what Maarten Bosker of Erasmus School of Economics, together with co-authors, found by examining the phased roll out of Jakarta's completely new metro line in 2019.
In a CEPR working paper and accompanying VoxDEV article, Maarten Bosker, Professor of International Trade and Development at Erasmus School of Economics, together with Sailesh Tiwari, Mark Roberts and Sanji Wibisana of the World Bank, describe their research. They find that people were not abandoning ride-hailing for MRT but were instead using it to reach and leave the MRT stations more efficiently.
Making use of the phased roll-out of Jakarta’s MRT
The phased rollout of Jakarta’s MRT gave the researchers the chance to observe of taxi-app use in a natural setting. For this, they looked at the response of ride-hailing activity to the gradual introduction of the new metro line. Using data on more than 17 million ride-hailing trips from Gojek, one of the largest ride hailing service in Indonesia, they tracked the daily number of ride-hailing trips starting or ending within 50 and 100 metres of the actual newly opened MRT stations. Additionally, they took the average distance of those trips into account.
Next, they compared these numbers to those for ride-hailing trips made during the same period, but starting or ending at locations similar to those where an actual MRT station was opened. These consisted of locations that will open as an MRT station only in the future, as well as of non-station locations along the opened MRT line.
More ride-hailing, shorter trips
The study shows a very large, positive impact on ride-hailing trip volumes close to the newly opened MRT stations. Within 20 days of the MRT line opening, ride‑hailing trips starting or ending close to an MRT station increased by 86%. After two months, this increase stabilised at 215%. At the same time, average trip distance fell sharply: 16% in the first 20 days and 23% after two months.
This combination of more trips but shorter distances shows that people were not abandoning ride-hailing for the MRT. Instead, they were using ride‑hailing to reach and leave MRT stations more efficiently, essentially extending the MRT system’s customer reach beyond walking distance.
Comparing results
This result differs from those found in earlier research, which found mixed evidence on the relationship between ride-hailing and public transport. One important reason for this is that this study was done in a unique context: Jakarta. This is a heavily congested city in a developing country, where fewer people own their own transport, public transport coverage is far from perfect, and walking is often too dangerous.
From research to urban policy
Ride-hailing services do not undermine the viability of public transport, instead they boost demand. By providing reliable first- and last mile connectivity, they extend the MRT’s reach to a larger segment of the population, such as people who live far away from stations, without private vehicles or good public access to traditional public transport hubs. This improved accessibility to the MRT, provided by ride-hailing services, also provides people with enhanced opportunities for finding employment and services, with positive implications for allocative efficiency, employment rates, and wages in Jakarta at large.
The researchers also emphasise that cities in developing countries, that plan on investing in MRT systems, would do well to anticipate higher ride-hailing activity around new stations. One example would be to design dedicated pick-up zones and multimodal links, as to avoid increased congestion near the stations.
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For more information, please contact Ronald de Groot, Media and Public Relations Officer at Erasmus School of Economics, rdegroot@ese.eur.nl, or +31 6 53 641 846.
