Informal transportation as a complement and substitute in Beijing

Do informal paid transportation services complement or substitute for paid transportation services? We leverage a large set of travel diaries from a government survey to examine the markets for formal and informal taxis in Beijing. We provide a set of stylized facts on the users of each form of transportation, where and when trips take place, and the purposes for trips. In some ways, informal taxis complement formal ones: they are cheaper, and serve passengers with lower incomes than those on regular taxis. In other ways, informal taxis substitute for formal ones: informal taxis overlap with formal ones on where they serve, patron demographic characteristics are very similar, and taxis are taken at the same times of day and for the same purposes. We conclude that informal taxis complement formal taxis in some ways, but substitute for them in others.