Abstract

We estimate the private benefits for Uber riders from using alternative payment methods. We focus on Mexico, where contrary to the US, riders have the option to use cash or credit cards to pay Uber drives. We use three large field experiments as well as several quasi-natural experiments to estimate the loss in private benefits for riders if a ban of cash as a payment method on Uber is implemented. We find that the Uber riders who use cash as means of payment, either sometimes or exclusively, suffer an average loss of approximately 50% of the expenditure of trips paid in cash before the ban. Further, the cost from the ban on cash falls disproportionately on lower income households.

Fernando Alvarez
Ph.D. in Economics, University of Minnesota. Saieh Family Professor of the Economics Department at The University of Chicago. He is also Research Associate of the National Bureau of Economic Research, Editor of the Journal of Political Economy, and Associate Editor of the Review of Economic Dynamics and the Quality Rated Journal of Macroeconomics.