Equity Implications of TNC Fare Variation: A Case Study of Didi Chuxing, Shanghai, 2015

The rise of transportation network companies (TNCs) such as Uber, Lyft and Didi Chuxing has been well documented, and is viewed with concern by some policy makers and planners. Some have advocated regulating TNCs to address perceived problems, which include unfair competition with existing taxis, a perception that TNCs may be less safe than conventional taxis, road congestion caused by a proliferation of ride-hailing vehicles, and a belief that TNCs may reduce transit ridership. Possible regulations to address these problems include background checks for drivers, safety standards, and in Shanghai, restrictions on TNC licenses and regulations on the ability of TNCs to rely on drivers from outside the city. Such regulations could cause TNC fares to increase, reinforcing ride-sourcing as a premium service targeting medium to high income travelers and hurting less well-off households. This study focuses on how the travel demand of users from different socio-economic groups changed in responses to changes in TNC fares during the introductory period of Didi Chuxing's operation in Shanghai in 2015. Using a large global positioning system (GPS)-based travel dataset from 2015 in Shanghai, the authors conducted panel analysis of how ride-sourcing demand was related to average property value, as a proxy for socioeconomic status, measured at small spatial scale at trip origins and destinations. The paper provides some of the first evidence about which user groups are more likely to use TNCs. The authors find that ride-sourcing demand in Shanghai is more elastic in high value locations, implying that regulatory interventions on TNCs in the Shangai context likely have their largest impacts on more well-off residents.