SMU SOE Seminar Series (February 25, 2026): Uber versus Trains? Worldwide Evidence from Transit Expansions

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ABSTRACT

We study how ride-hailing and public transit interact -- an open question with important implications for transportation policy and urban form. We develop a dynamic model of mode choice that features three key mechanisms: (i) \emph{substitution}, whereby riders switch from Uber to transit near stations; (ii) \emph{last-mile complementarity}, whereby Uber is used to access transit; and (iii) a dynamic choice-set effect, whereby outbound mode choice constrains return options, giving Uber \emph{option value}. We test the model's implications using a dynamic difference-in-differences design combined with new data on 650 global rail transit expansions and the universe of nearby Uber trips. We document three patterns consistent with each of the above mechanisms: Uber usage rises sharply within 100 meters of new stations (last-mile complementarity), declines locally among nearby residents and workers (substitution), and falls modestly overall for these users as local reductions are partially offset by  increased Uber usage elsewhere (option value). We find that while transit and Uber are substitutes in the aggregate, their local interaction depends on competing forces often overlooked in prior work.

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