Publication: Are Ride-Hailing Services and Public Transport Complements or Substitutes?: Evidence from the Opening of Jakarta’s MRT System
Loading...
Published
2023-12-20
ISSN
Date
2023-12-20
Author(s)
Bosker, Maarten
Wibisana, Putu Sanjiwacika
Wihardja, Maria Monica
Yanurzha, Ramda
Editor(s)
Abstract
Motorbike-based ride-hailing services are widespread in many of the most congested cities in the developing world. These services often predate the construction of modern public mass rapid transit systems. Ride-hailing services may complement such investments by providing important first and last mile connectivity. However, it has also been argued that they undermine the viability of mass rapid transit systems as people prefer to use ride-hailing services given their convenience and low prices. This paper applies an event study research design to proprietary, high-frequency data from one of Indonesia’s largest ride-hailing services, Gojek. The findings show that the opening of stations on Jakarta’s first mass rapid transit line led to large increases in ride-hailing activity in the immediate vicinities of the stations. This was accompanied by a significant decline in the average distance of ride-hailing trips to and from the station locations. These findings are consistent with ride-hailing services complementing public transport by providing first and last mile connectivity to the newly opened mass rapid transit system. Interestingly, this holds for both commuting and non-commuting trips and is strongest for mass rapid transit station locations that were not already served by Jakarta’s bus rapid transit system.
Link to Data Set
Citation
“Bosker, Maarten; Roberts, Mark; Tiwari, Sailesh; Wibisana, Putu Sanjiwacika; Wihardja, Maria Monica; Yanurzha, Ramda. 2023. Are Ride-Hailing Services and Public Transport Complements or Substitutes?: Evidence from the Opening of Jakarta’s MRT System. Policy Research Working Papers; 10640. © World Bank. http://hdl.handle.net/10986/40773 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Publication The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review(Washington, DC: World Bank, 2025-09-10)This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication Rigging the Scores: Corruption through Scoring Rule Manipulation in Public Procurement Auctions(Washington, DC: World Bank, 2025-12-02)Public procurement is highly susceptible to corruption, especially in developing countries. Although open auctions are widely adopted to curb it, this paper finds that corruption remains prevalent even within this procurement format. Procurement officers can collaborate with firms to manipulate scoring rules, ensuring predetermined winners, while corrupt firms submit noncompetitive bids to meet minimum bidder requirements. Using extensive data from Chinese public procurement auctions, the paper introduces model-driven statistical tools to detect such corruption, identifying a corruption rate of 65 percent. A procurement expert audit survey confirms the tools’ reliability, with a 91 percent probability that experts recognize suspicious scoring rules when flagged. Firm-level analysis reveals that local, state-owned, and less productive firms are favored in corrupt auctions. Lastly, the paper explores policy implications. Analysis of the national anti-corruption campaign since 2012 suggests that general investigations may be insufficient to address deeply ingrained corrupt practices. Using counterfactuals based on an estimated structural model, the paper shows that implementing anonymous call-for-tender evaluations could improve social welfare by 10 percent by eliminating suspicious rules and encouraging broader participation.Publication Labor Demand in the Age of Generative AI: Early Evidence from the U.S. Job Posting Data(Washington, DC: World Bank, 2025-11-18)This paper examines the causal impact of generative artificial intelligence on U.S. labor demand using online job posting data. Exploiting ChatGPT’s release in November 2022 as an exogenous shock, the paper applies difference-in-differences and event study designs to estimate the job displacement effects of generative artificial intelligence. The identification strategy compares labor demand for occupations with high versus low artificial intelligence substitution vulnerability following ChatGPT’s launch, conditioning on similar generative artificial intelligence exposure levels to isolate substitution effects from complementary uses. The analysis uses 285 million job postings collected by Lightcast from the first quarter of 2018 to the second quarter of 2025Q2. The findings show that the number of postings for occupations with above-median artificial intelligence substitution scores fell by an average of 12 percent relative to those with below-median scores. The effect increased from 6 percent in the first year after the launch to 18 percent by the third year. Losses were particularly acute for entry-level positions that require neither advanced degrees (18 percent) nor extensive experience (20 percent), as well as those in administrative support (40 percent) and professional services (30 percent). Although generative artificial intelligence generates new occupations and enhances productivity, which may increase labor demand, early evidence suggests that some occupations may be less likely to be complemented by generative artificial intelligence than others.Publication Investment Policy Reforms and Foreign Direct Investment Inflows(Washington, DC: World Bank, 2025-12-01)Foreign direct investment has the potential to introduce much-needed capital and expertise in emerging and developing economies. To attract foreign direct investment, many countries have eased restrictions on foreign ownership in various sectors, reformed their institutions, and set up investment promotion agencies. Until the mid-2010s, Ethiopia remained one of the few countries that resisted this trend, with several stringent restrictions in place on foreign direct investment entry and operations in the country. This study employs a synthetic control method to examine patterns in foreign capital inflows following a series of investment policy reforms that were substantively introduced in the mid-2010s (circa 2015). The study offers evidence that investment policy reforms contributed to a significant foreign direct investment inflow in Ethiopia, compared to what would have occurred in the absence of these policies. An alternative strategy that conservatively specifies the donor country pool using an AI-assisted deep search technique changes the donor pool weighting matrix of the synthetic control method, but the estimated policy effects largely remain robust to this specification. The findings highlight the importance of targeted reforms in promoting foreign direct investment inflow in developing countries.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Public Transport Subsidies and Affordability in Mumbai, India(World Bank, Washington, DC, 2007-11)This paper describes the role of public transport and the nature and incidence of transport subsidies in Mumbai, India. Mumbai has an extensive rail and bus network, and public transport is used for over 75 percent of all motorized trips in Greater Mumbai. Both rail and bus fares in Mumbai are subsidized: BEST, which operates public buses in Mumbai, is also an electric utility, and subsidizes bus fares from electricity revenues. We analyze the incidence of these subsidies, and their effect on mode choice, using data from a survey of households in Greater Mumbai. In Mumbai, as in many cities, the middle class is more likely to use public transport for travel than the poor. The poor, however, also use public transit, and their expenditure on public transit constitutes, on average, a larger share of their income than it does for the middle class. It is, therefore, the case that the poor benefit from transit subsidies in Mumbai, as well as the middle and upper-middle classes; however, the poorest 27 percent of the population receives only 19 percent of bus subsidies and 15.5 percent of rail subsidies. Indeed, 26 percent of the lowest income households surveyed do not use rail, while 10 percent do not use bus, implying that they receive no transit subsidies. Expenditure on transport accounts for 16 percent of income in the lowest income category (<5000 Rs./month), with 10 percent of income, on average, spent on bus and rail fares. This percentage, however, is not evenly distributed: it is much higher than 10 percent for households in which workers take the bus or train to work, and lower for households in which the main earner walks to work. Even in these households, however, 12.5 percent of income is spent on transportation. Expenditure on public transport would be even higher if bus fares in Mumbai were not subsidized. In 2005-2006, transport revenues of BEST fell below total costs by 30 percent and below operating costs by 20 percent. Rail fares, which are much lower than bus fares per km traveled, officially covered operating costs and almost covered depreciation expenses.Publication Hukou and Highways(World Bank, Washington, DC, 2015-06)China has used two main spatial policies to shape its geographic patterns of development: restricted labor mobility through the Hukou residential registration system and massive infrastructure investment, notably a 96,000 kilometer national expressway network. This paper develops a structural new economic geography model to examine the impacts of these policies. Fitting the model to available data allows simulating counterfactual scenarios comparing each policy’s respective impact on regional economic development and urbanization patterns across China. The results suggest large overall economic benefits from constructing the national expressway network and abolishing the Hukou system. Yet, the spatial impacts of the two policies are very different. The construction of the national expressway network reinforced existing urbanization patterns. The initially lagging regions not connected to the network have not benefitted much from its construction. By contrast, removal of the Hukou restrictions, which Chinese policy makers are considering, would result in much more widespread welfare gains, allowing everyone to gain by moving to where he or she is most productive. Removal of the Hukou restrictions would also promote urbanization in currently lagging (inland) regions, mostly by stimulating rural to urban migration.Publication Greater Cairo : A Proposed Urban Transport Strategy(Washington, DC, 2006-11-10)The objective of the urban transport strategy note (UTSN) is to provide an assessment of the urban transport system in Greater Cairo (GC), identify what now appear to be the most pressing urban transport problems, and framework for urgent policy actions and investment priorities that would be the basis of a formal transport strategy to be adopted and implemented by the authorities of the metropolitan area of Cairo. This note is essentially based on a thorough review of the 2002 Urban Transportation Master Plan for GC and a rapid analysis of the current conditions and performance of the urban transport system. This note includes nine chapters. The first chapter provides a quick overview of the current situation of the UT in GC. In chapter two, present the main guiding principles and key components of the proposed strategy to prepare the ground for the following chapters. Chapter three to nine elaborate on the issues and policy recommendations for each of the components of the strategy: organization and operation of public transport systems (chapter three), investment policy in urban transport (chapter four), traffic management policy (chapter five), introducing travel demand management (chapter six), strengthening traffic enforcement (chapter seven), building urban transport institutions (chapter eight), affordability of urban transport services and financing policy (chapter nine). Finally a last chapter (ten) presents a priority action program including selected coherent mix of policy actions and cost effective investments to be implemented in the short and medium terms to initiate a process of long term improvements of the UT conditions and operations in Cairo metropolitan.Publication Urban Mass Transport Infrastructure in Medium and Large Cities in Developing Countries(Washington, DC, 2012)Developed at the request of the Mexican G20 Presidency for consideration by the Finance Ministers and Central Bank Governors at the G20 Leaders' Summit in Mexico, and jointly prepared with the Asian Development Bank, this policy paper positioned green transport in the context of cities development. Urban transport determines the shape of a city and its ecological footprint. Many cities in low and middle income countries are at a crossroads. Policy decisions taken now, while car use is still relatively low and cities retain a relatively transit friendly, compact urban form, will affect how people will live in their cities for many decades into the future. A new paradigm of urban transport can be part of the solution to reversing the deteriorating situation in some cities of developing countries, and supporting others to embark on a sustainable, low carbon, green growth path: developing a city for people rather than cars, and including public and mass transport as a major component of the modal structure. Implementing such a new paradigm can be truly transformational. This joint World Bank and Asian Development Bank paper lays out six aspects, which are most difficult to align, yet, are critical to ensure the sustainability of urban transport systems, visionary leadership, integrated strategy for land use and urban transport, coordination among agencies, domestic capacity, adequate cost recovery, and private participation in the operation and construction of urban transport systems. The paper proposes a set of new initiatives for G20 leaders' consideration, including the development of an umbrella toolkit to guide policy makers in charge of urban planning to make transport decisions best suited to their local contexts.Publication Urban Transport for Development : Towards an Operationally-Oriented Strategy(World Bank, Washington, DC, 2008-10)This paper arose from the perception that a gap existed between the practice of project design and the formal Bank strategies for transport and urban sectors as stated in the cited reports. Formal strategies tend to be too general to be linked meaningfully to project designs. The paper in hand attempts to close this gap by putting forward a different, operationally-oriented concept of urban transport strategy and derives one such strategy from a review of recent Bank-funded projects. The term "operationally-oriented" means that the strategy is expressed in terms of objectives, policies, institutions and investments, mimicking the structure common to all individual projects. Projects on which the paper is based date from the last 15 years. They exhibit a wide diversity of features, reflecting inherited local conditions, the nature and rhythms of socio-economic changes underway, and the vintage of client-Bank relations. Yet, a strong central tendency is also evident, amounting to a coherent and robust approach. The core strategy, as this approach is called in the paper, aims to protect and nurture public transport services and non-motorized transport modes, with underlying meta-objectives of equity and environmental sustainability.
Users also downloaded
Showing related downloaded files
Publication World Bank East Asia and Pacific Economic Update, October 2025: Jobs(Washington, DC: World Bank, 2025-10-07)GDP growth in the East Asia and Pacific (EAP) region remains above the global average but is projected to slow down in 2025 and even further in 2026. The sluggishness is due to a less favorable external environment—rising trade restrictions, easing but still elevated global uncertainty, and slowing global growth—as well as persistent domestic difficulties. Today, many people are in low-productivity or informal jobs, and many of the young cannot find any jobs. The class of people vulnerable to falling into poverty is now larger than the middle class in most countries. In a region that thrived because export-oriented, labor-intensive growth created more productive jobs, firms must deal with higher tariffs and workers must contend with the growing use of robots, AI and digital platforms. More productive jobs would be created by reforms to enhance economic opportunity, human capacity and their virtuous interplay.Publication Business Ready 2024(Washington, DC: World Bank, 2024-10-03)Business Ready (B-READY) is a new World Bank Group corporate flagship report that evaluates the business and investment climate worldwide. It replaces and improves upon the Doing Business project. B-READY provides a comprehensive data set and description of the factors that strengthen the private sector, not only by advancing the interests of individual firms but also by elevating the interests of workers, consumers, potential new enterprises, and the natural environment. This 2024 report introduces a new analytical framework that benchmarks economies based on three pillars: Regulatory Framework, Public Services, and Operational Efficiency. The analysis centers on 10 topics essential for private sector development that correspond to various stages of the life cycle of a firm. The report also offers insights into three cross-cutting themes that are relevant for modern economies: digital adoption, environmental sustainability, and gender. B-READY draws on a robust data collection process that includes specially tailored expert questionnaires and firm-level surveys. The 2024 report, which covers 50 economies, serves as the first in a series that will expand in geographical coverage and refine its methodology over time, supporting reform advocacy, policy guidance, and further analysis and research.Publication Indonesia Country Climate and Development Report(World Bank, Washington DC, 2023-04-28)Climate challenges in Indonesia are intertwined with the country’s growth and development trajectories. Indonesia’s Country Climate and Development Report (CCDR) takes a historical look at climate and development challenges in Indonesia to: (i) present a baseline for the future low-carbon and climate-resilient journey; and (ii) develop a framework to illustrate climate-growth dynamics. The framework is centered around Indonesia’s abundant supply of carbon-intensive natural resources-land and energy-matched by high demand for those resources in parts of the economy that drive growth-agriculture, urban expansion, industry, transportation, and trade. The resulting emissions have direct and indirect costs. They erode climate resilience and increase costs from climate shocks. Rising carbon content in the economy also imposes sunk costs for the low-carbon transition. Although these challenges are known, and efforts are being made to tackle them, the framework aims to link these economy-wide issues to the ongoing and future reforms that are discussed in the CCDR.Publication Indonesia Economic Prospects, December 2024(Washington, DC: World Bank, 2024-12-19)Indonesia’s economy remains resilient, buoyed by strong domestic demand and a recovering service sector. The current account deficit widened, driven by moderating terms of trade and cyclical factors that intensified services and income outflows. After two years of consolidation, the fiscal policy stance loosened slightly. Meanwhile, Bank Indonesia (BI) has been incrementally easing its policy stance while managing currency stability. Indonesia needs to significantly increase tax revenues to investment in human and physical capital to achieve its high-income status ambitions. The country’s public capital stock lag regional and structural peers, falling far short of advanced economies. Closing these gaps could enhance productivity growth and support the sustained 6 percent growth required to reach high-income status by 2045. However, the investment needed is substantial. A significant portion of this must be financed through increased tax revenues, as a substantial rise in debt would be risky and would violate statutory caps on deficit and debt levels. Overall, increasing tax revenues will require reforms that widen the tax base, improve tax administration, and address structural constraints to compliance. Reforms to widen the tax base could lower the registration threshold for VAT to align with middle-income country norms, which also applies to the temporary final tax for MSMEs. Meanwhile, a permanent final tax regime could be introduced for MSMEs below the threshold. Special CIT treatments, such as for construction services, publicly listed firms, and non-standard VAT exemptions, may be phased out gradually. Tax incentives need to become more strategic, time-bound, and systematically reviewed. Improving compliance requires better risk management, using high-quality third-party data and integrating fragmented government systems. Simplifying and clarifying VAT regulations can reduce disputes and administrative burdens. Lastly, addressing structural constraints involves deepening financial sector depth, which is expected to have the secondary effect of facilitating compliance through improved information and formalization.Publication Indonesia Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-23)Indonesia’s economy remains resilient amid worsening global conditions. GDP grew at 4.9 percent year-on-year (yoy) in Q1-2025, slightly lower than previous post-pandemic quarters. Domestic demand was impacted by reduced government consumption and lower investment. Budget efficiency measures led to a contraction in public consumption, while investment in the construction and manufacturing sectors dipped due to investors’ concerns over domestic and global policy uncertainty. Meanwhile, declining commodity prices worsened Indonesia’s terms of trade. The supply side showed notable contributions from the agriculture and services sectors. Businesses and households are adjusting to economic uncertainty, but weak consumption of middle-class households has been persistent since the pandemic. The GOI structural reform agenda could accelerate growth further. In response to rising global policy uncertainty, the GOI devised a program of deregulation including reforms to the business environment and licensing, investment liberalization, trade and logistics reforms, and digital services. These reforms complement other reforms currently in play, like those related to financial sector deepening, and accompany the demand stimulus that the GOI is targeting through its priority programs. If implemented, these reforms could gradually expand the economy’s capacity, unlock further FDI, boost investment returns, and ensure productivity gains. The report suggests that this will translate into better job creation and raise GDP growth to 5.3-5.5 percent in 2026-2027. This report identifies the necessary steps to reach the target of providing 3 million housing units each year. In short, to meet the housing target and supercharge current efforts, the government needs to act as both a housing provider and a housing facilitator: instituting housing regulation reforms, accelerating public-funded housing programs, and creating an enabling environment that attracts private investment in Indonesia. Directly, 3.8 billion dollars in annual public investments can create an estimated 2.3 million jobs and mobilize 2.8 billion dollars in private capital. Reforms can create an enabling environment for housing investments and indirectly help multiply this impact.