Ride-Sharing Saves Time, Money, and Lives

Published February 17, 2016

After months of delays, the office of New York City mayor Bill de Blasio released a long-awaited “impact study” examining the effect of Uber — a popular “peer-to-peer economy” business connecting drivers and riders — on the city’s traffic-flow patterns.

The study, conducted by McKinsey & Company, a global management consulting firm, found that Uber and other transportation-network companies “have not driven the decline in Central Business District speeds that the City has recently experienced.”

Instead, the impact study found traffic congestion to be primarily the result of factors such as “inadequate space at the curb for trucks and delivery vehicles” and “blocking lanes for construction of buildings, subways, underground utility infrastructure, or road repairs.”

The first shots in city lawmakers’ war on ride-sharing were fired in in January 2014, when the city’s Taxi and Limousine Commission demanded to see Uber’s private data on consumers’ trip routes and other proprietary information. When Uber refused, the commission partially shut down the company’s operations. Uber appealed, and the commission suspended the ban later that month.

Over the summer, de Blasio, the recipient of more than $500,000 in campaign donations from the taxicab industry, fought publicly with Uber, penning an article proclaiming that “no company’s multi-billion-dollar political war chest gives it a blank check to skirt vital protections and oversight for New Yorkers.”

But the mayor retreated unexpectedly in August, dropping plans to restrict the number of new drivers Uber would be allowed to hire. In return, Uber agreed to provide the tracking data that city regulators wanted for their impact study.

De Blasio’s hypothesis was that Uber’s growth has added to the city’s traffic congestion, but the impact study found otherwise.

In addition, using data collected from Uber records, Manhattan Institute research fellow Jared Meyer discovered that the rise of the sharing economy actually improved the lives of New York City residents. Consumers in underserved or economically depressed boroughs — away from the city’s airports and downtown areas — had the highest increases in demand for UberX, the company’s basic service tier.

Not only do the benefits provided by Uber outweigh the costs imagined by the service’s opponents, but academic research suggests Uber may be a literal lifesaver for some consumers. A study published by Temple University, written by assistant professor Brad Greenwood and associate professor Sunil Wattal, studied how the availability of Uber affects alcohol-related vehicular homicide rates.

Studying two California cities over a five-year period, Greenwood and Wattal found a “significant drop in the rate of alcohol-related vehicular homicides after the introduction of Uber.” Scaling the data up to the national level, they estimated that making Uber available everywhere would save 500 lives and enhance public welfare by $1.3 billion annually.

Lawmakers in every city and state, not just New York City, should empower consumers and enterprising individuals to trade freely and voluntarily among themselves. By doing so, they would save huge amounts of money, preserve hundreds of lives, and spur economic development.

Instead of trying to hold back the wave of the future, lawmakers should allow consumers to reap the economic and societal benefits of the peer-to-peer economy’s rising tide.

[Originally published at Real Clear Policy]