The Effect of Ride-Hailing Platforms on the Automobile Industry in the United States: An Empirical Study

This study examines the impact of the emergence and growth of ride-hailing platforms in the U.S. on the financial performance of automobile manufacturers. Utilizing panel data from 11 major U.S. automobile manufacturers spanning from 2002 to 2019, we measure the growth of ride-hailing platforms based on the annual revenues of the two leading companies in this sector, Uber and Lyft. Our study shifts the focus from the impact of ride-hailing platforms on consumer vehicle purchase behavior to their effect on automobile manufacturers. Through the application of fixed-effect methodology in our study, we find that the growth of ride-hailing platforms positively influences the financial performance of automobile manufacturers by boosting their production volumes. Our findings offer initial evidence that automobile manufacturers can derive significant benefits from the rise of ride-hailing platforms. Moreover, these platforms could collaborate with automobile manufacturers to create incentives for consumers to purchase new vehicles. This study contributes to the understanding of how digital transformation in the form of ride-hailing services can reshape traditional industries and stimulate economic opportunities in the automobile sector.