Chicago Riders’Choice of Uber and Lyft overTransit Implies a Median Breakeven Value of Travel Time Equal to theRegional Hourly Wage of $30 per Hour

The use of transportation network companies (TNCs), such as Uber and Lyft, is widespread in many US cities, including those with good transit. However, transit use produces smaller externalities relative to private vehicles and is cheaper but can increase travel time. Here we compare the benefits and costs of real TNC trips in Chicago to a counterfactual in which they are performed by transit. We assess total fare and monetized value of travel time, as well as externalities. We find that the median breakeven value of time at which a rider would be indifferent between transit and a TNC, $34/hour (interquartile range: $21–60), is almost exactly equal to the regional median wage, which in turn is a metric that is commonly used to value travel time for business purposes. Internalizing externalities would require riders to value their time at $37/hour ($22–64). Transit use and electrification of TNC gasoline vehicles could reduce air emissions externalities to a similar extent assuming current transit load factors. Half of transit trips’ duration consists of walking and waiting; policies that reduce walking and waiting would make transit more attractive.