Increasing automobile occupancy by sharing rides can help reduce overall vehicle miles travelled (VMT), and thereby alleviate congestion, curtail vehicle emissions and improve the efficiency of highway operations. This study aimed to describe the effect of price and time on a rider’s choice between private party and shared ride hailing. The study sought to understand behavior and the impacts of price and time tradeoffs for two models of sharing private rides, including 1) Shared Options in ridehailing applications (mobility apps that allow users to select private rides and provide an upfront estimate on price and time), and 2) Ridesharing using app-based incentive tools (emerging apps that allow traditional carpooling matches to be created in real time). Impacts of four changes in modal travel characteristics that could relate to potential policy mechanisms were evaluated:
- Increased cost savings for shared transportation network company (TNC) trips relative to private TNC trips.
- Reduced travel time penalty for shared TNC trips relative to private TNC trips.
- Increased price differential of private car trips relative to all other modes.
- Rewarding carpooling trips but not private car trips.
This study used data on revealed preferences for private party and shared ridehailing trips in 15 American cities, coupled with a large Transportation Network Company's (TNC) survey of 4,365 of its users that was administered in late 2018.
The study used three major data source types—TNC surveys, app-based ridesharing data, and studies in the literature about behavioral responses to changes to the price of driving and parking. The TNC administered the survey between November 26 and December 10, 2018 in 15 U.S. markets that had access to its ridesharing product. The survey asked users questions about their choice of shared (ridesharing) or private ridehailing products and how that choice might have changed had they been presented with shared and private options at different prices and trip durations. Data from two app developers were used to evaluate the impact of incentives on carpooling behavior. A series of studies were reviewed to arrive at an elasticity value to use to estimate the effect of increasing the relative cost of driving alone over carpooling on mode share in a set of metropolitan areas that were the same as the TNC survey. To evaluate the effect of different scenarios on ridesharing behavior, a statistical model was developed to provide an understanding of how changes in trip cost and travel time affected mode choice for various market segmentations in different cities.
- Increasing the price differential between shared and private TNC rides from 35 percent to 50 percent (an average $2.24 additional discount) increased the user’s willingness to share by 7.5 percent, while increasing the price differential from 50 percent to 75 percent (an average $3.44 additional discount) increased the user’s willing to share by 11.0 percent.
- The effect of a $1 per mile per trip greater price difference was an 8.6 percentage point increase in the probability of sharing. This indicated that, for all users, an additional $1 per mile price difference increased the probability of sharing from 29.9 percent to 38.5 percent.
- Reducing the travel time penalty for shared rides by one minute per mile resulted in a 33.25 percentage point increase in probability of sharing. In other words, travel time savings of one minute per mile increased the probability of sharing for all users from 29.9 percent to 63.2 percent.
- A price difference of $1.16 per mile between shared TNC rides and private TNC rides would increase the probability of ridesharing for general trips by 10 percentage points.
- It was estimated that $1 per trip increase for “ride-alone” trips over the price for shared trips would save more than 3.5 billion vehicle miles annually in the 15 markets studied.
- When both the price and time strategies were combined, the $1 additional price difference between private and shared TNCs and 15 second/mile travel time advantage would reduce VMT by roughly 173 million miles per year for all trips in all study cities.
- Incentives of only 2 cents per mile on the carpooling platform were effective at sustaining desired travel behavior. Monthly average awards of $7.54 for participants receiving 2 cents per mile appeared to be affordable when compared to other transportation investment options.