Do Minorities Pay More for Congestion Taxes? Evidence from a Tax on Ride-sharing

Authors:

Mario Leccese, University of Maryland

Abstract:

I study the heterogeneous consequences across areas in which different racial groups are concentrated of a congestion tax on ride-sharing. I find that, on average, the price increase was the highest ($0.972/ride) for trips starting in Black areas, while it was the lowest ($0.750/ride) for trips starting in White areas. This is consistent with a larger elasticity of demand in White areas due to better access to public transit and wider availability of private vehicles across the population. Lastly, the tax reduced ride-sharing usage only in Black and Hispanic areas, and a simple back of the envelope calculation suggests that riders from Black areas were the most penalized by the tax, with an aggregate loss of over $17,000 per day.