Taxing ride‐sharing: Which neighborhoods pay more?

Abstract

AbstractI examine the short‐run impact of taxing ride‐sharing trips on the price and usage of ride‐sharing across different neighborhoods of Chicago and investigate whether the tax had unequal effects on neighborhoods with different racial compositions. I document significant heterogeneity in price increases due to the tax across neighborhoods of departure, showing that this was correlated with their differential access to alternatives to ride‐sharing, such as public transit. Clustering neighborhoods based on their racial composition reveals that Black areas experienced particularly high price increases and reductions in usage. Overall, the burden of the tax fell more heavily on minority‐concentrated areas.