The advent of smart-phone based, ride-sharing applications has revolutionized the vehicle for hire market. Advocates point to the ease of use and lower wait times compared to hailing a taxi or pre-arranging limousine service. Others argue that proper government oversight is necessary to protect ride-share passengers from driver error or vehicle part failure and violence from unlicensed strangers. Using a unique panel of over 150 cities and counties from 2010 through 2013, we investigate whether the introduction of the ride-sharing service, Uber, is associated with changes in fatal vehicle crashes and crime. We find that Uber’s entry lowers the rate of DUIs and fatal accidents. For most specifications, we also find declines in arrests for assault and disorderly conduct.
1. Fatal Accident Rate. Specifically, we find that entry [of Uber] is associated with a 6% decline in the fatal accident rate. Fatal night-time crashes experience a slightly larger decline of 18%.
In both the weighted and unweighted estimations, we also discover a continued decline in the overall fatal crash rate and the rate of vehicular fatalities for the months following the introduction of Uber. For each additional year of operation, Uber’s continued presence is associated with a 16.6% decline in vehicular fatalities.
2. DUIs and Crime. We find a large and robust decline in the arrest rate for DUIs. Depending upon specification, DUIs are 15 to 62% lower after the entry of Uber. The average annual rate of decline after the introduction of Uber is 51.3% per year for DUIs. For most specifications, we also observe declines in the arrest rates for non-aggravated assaults and disorderly conduct.
Claiming consumer protection, some community’s leaders have sought greater government oversight and limits on the entry of ride-sharing services. Articles often cite concerns about the safety of riders and drivers in this comparatively unregulated service.
We investigate and find that many of these concerns are, at least on net, unwarranted. Using a differences-in-differences specification and controlling for county-specific linear trends, we find that the entry of ride-sharing tends to decrease fatal vehicular crashes. We also observe declines in arrests for assault, DUI, and disorderly conduct. In many cases, these declines become larger the longer the service is available in an area.