Is Uber a substitute or complement for public transport? You could make arguments either way. On one hand, passengers could use Uber instead of public transport. So, if Uber becomes more available or relatively less expensive, some passengers might switch to Uber for their commuting or other journey - in that case, Uber and public transport would be substitutes. On the other hand, passengers could use Uber to solve the 'last mile' problem. The could take public transport for most of their journey, and then use Uber to 'fill in' the first or last part of their journey, which public transport cannot provide - in that case, Uber and public transport would be complements.
So, which is it? Substitutes or complements? That is the question addressed in this 2018 article by Jonathan Hall (University of Toronto), Craig Palsson (Utah State University), and Joseph Price (Brigham Young University), published in the Journal of Urban Economics (ungated version here). They use data from US Metropolitan Statistical Areas (MSAs) over the period from 2004 to 2015, and apply a difference-in-differences approach. That essentially involves comparing MSAs with and without Uber, before and after Uber was introduced to each MSA. In addition to using a straightforward binary variable to capture Uber's presence (or not), they also use a measure of the intensity of Uber's penetration into each MSA market, based on the proportion of Google searches for "Uber".
While also controlling in their analysis for total employment and unemployment rates, population, and gas prices, Hall et al. find that:
...when Uber arrives in an MSA, transit ridership does not change much, with a coefficient that indicates there is a 0.26% increase in public transit use which is not statistically significant. However... as Uber becomes more commonly used in the MSA, there is an increase in public transit use, with a standard deviation increase in Uber penetration increasing public transit ridership by 1.4%.
In other words, Uber and public transport are complements. Hall et al. suggest that:
One reason Uber is a complement rather than a substitute for the average transit agency may be that transit is still much cheaper to use. The median minimum Uber fare is $5, while transit fares average just $1. Undiscounted fares for bus or light rail are never above $3, and for those with a monthly pass the marginal fare is zero. Transit is cheaper by enough that Uber’s role in adding flexibility to the transit system is more important than its ability to substitute for riding transit.
So, Uber is simply too expensive to be a substitute for public transport for most passengers. Hall et al. then extend their analysis, and find that:
Uber most strongly complements small transit agencies in large cities. This is likely because a small transit agency in a large city provides the least flexible service in terms of when and where they travel, and so Uber’s ability to add flexibility for such agencies is valuable to riders... In addition, transit riders in larger cities tend to be wealthier, and so there is greater overlap between those who ride transit and can afford to take Uber...
Finally, Hall et al. look at the effect of Uber on commuting times, using data from the American Community Survey. If passengers are using Uber for the 'last mile' portion of their journey, that may reduce their commuting time, but increase traffic and the commuting times for others. Hall et al. find that, as expected:
For public transportation users, the coefficients are large and negative, but the results are not statistically significant, and commute times for private vehicle commuters in large MSAs or those with a small transit agency increased by 1.5–2.5%. Together these results suggest that Uber reduced commute times for public transit users while increasing congestion.
So, in most cases, and especially in large cities with small transit agencies, Uber is a complement for public transport. However, adding Uber to a city is not without cost. Commuters who are not using public transport likely face more traffic congestion as a result of Uber (as I've noted before).
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