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.

More Research From These Scholars

BFI Working Paper Apr 1, 2017

Cash Burns: An Inventory Model with a Cash-Credit Choice

Fernando Alvarez, Francesco Lippi
Topics:  Energy & Environment, Fiscal Studies, Monetary Policy