On the Effects of the Availability of Means of Payments: The Case of Uber / Fernando E. Alvarez, David O. Argente.

Format:

Book

Author/Creator:

Alvarez, Fernando E.

Contributor:

National Bureau of Economic Research.

Argente, David O.

Series:

Working Paper Series (National Bureau of Economic Research) no. w28145.

NBER working paper series no. w28145

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We use three quasi-natural experiments in Mexico and one in Panama to estimate the effects of having the option to pay with cash on Uber rides. The ability to pay in cash affects the demand for rides, which is reflected in large changes in the total number of trips, fares, miles, and number of users after Uber introduced cash payments, particularly in lower-income city blocks. On the other hand, the effects on prices, estimated times of arrival, and competitor pricing are negligible, consistent with the supply of trips being very elastic. Although cash payments naturally increase the fraction of users that pay exclusively with cash, more than half of the users have access to both cards and cash, and alternate between payment methods. We find evidence consistent with cash and card payments being imperfectly substitutable at both the intensive and extensive margins, which magnifies the impact of policies that restrict the availability of payment methods.

Notes:

Print version record

November 2020.