Is ride-sharing good for environment? Evidence from combining satellite and survey data on U.S. cities

Abstract

We estimate the causal effect of ride-hailing entry on transport-related air pollution, disentangling its mediating effect through changes in commuting modes in U.S. cities. To do so, we combine two sets of empirical approaches. First, for our main outcome regression, we leverage granular satellite-based NO2 concentration data and a newly constructed Google Trends-based measure of ride-hailing presence, with the staggered difference-in-differences design. Second, to explore its mediating mechanism, we use household-level commuting mode data to run two auxiliary regressions: commuting modes on ride-hailing entry and ambient NO2 concentration on commuting modes. For identification on the latter, we construct our instruments by combining geography-based instruments with leave-one-out regional average exposure to Uber's official entry. We find robust evidence that (i) ride-hailing improves air quality in highly dense cities, but has no significant impact in cities with low to medium density and (ii) this air quality improvement is indeed mediated by the associated changes in commuting mode choices. Our findings provide strong empirical support for the hypothesis that the environmental impact of ride-hailing depends on its complementarity with public transit.