Transportation Technology and Gentrification: Evidence from the entry of Ridesharing Services

TL;DR

This study investigates how the entry of ridesharing services in U.S. cities influences urban gentrification, housing prices, and resident demographics, revealing that ridesharing can promote gentrification and inequality, especially affecting non-homeowners.

Contribution

It provides empirical evidence on the impact of ridesharing on urban gentrification, housing prices, and socio-economic disparities, highlighting effects conditional on homeownership status.

Findings

Housing prices increase by 9% in affected areas.

Rich-younger residents migrate into gentrified neighborhoods.

Non-homeowners experience 11% displacement and 42% higher delinquency.

Abstract

We analyze the staggered entry of rideshare services across U.S. metropolitan areas, estimating its effect on the spatial redistribution and real outcomes of residents. Ridesharing services gentrify urban areas-especially those with ex-ante lower housing values-causing housing prices to rise 9 percent, with the in-migration of rich-younger individuals more than offsetting the out-migration of incumbent residents and reduced in-migration of poorer individuals. Impact on incumbent residents is conditional on ex-ante homeownership. For homeowners, there is no displacement and a decline in delinquency rates. For non-homeowners, displacement and delinquency rates rise 11 percent and 42 percent, respectively. Our study emphasizes how the private provision of high-end transportation technologies can increase urbanization and exacerbate inequality.