By ZACK VRANA | May 12, 2016
Anyone who has called for a taxi can attest to how much faster and easier rideshare services such as Uber and Lyft have made getting a ride. If you’re in downtown Milwaukee, your ride will arrive within five minutes almost any time of day, whether it’s 7 a.m. rush hour or 2 a.m. bar closing.
As an Uber driver, I can attest to how many Milwaukeeans are spilling out of the taverns and using their smartphone apps to get a ride home after last call.
The benefits of rideshare services to passengers are obvious: lower costs, convenience, short wait times and automatic billing. Less obvious is the benefit to society: reduced drunken driving.
In economics, few principles are as generally supported as the idea that a freer market is a better one. The taxi medallion system — a regulatory system initiated in the 1930s that allows a city to limit the number of cab licenses — is a classic example of a quantity restriction, which generally leads to increased prices and reduced service.
Medallions help meet public concerns about vehicle safety, driver screening and insurance, but they do so through costly regulations, with those costs often passed on to passengers via higher fares. Those higher fares, in turn, likely dissuade some intoxicated Wisconsinites from taking a cab. For years, many have gotten behind the wheel themselves — with disastrous and tragic results. In 2015, 166 people died in Wisconsin as a result of drunken drivers, which accounts for a third of total traffic fatalities in the state; in 2014, the toll was 178.
Fortunately, there is evidence that some inebriated Wisconsinites are starting to make better decisions due to the increasing availability of ridesharing.
Ridesharing’s introduction and growth
In the United States, rideshare services grew rapidly in population centers such as San Francisco, New York and Chicago. Uber and Lyft entered the Milwaukee market in 2014, and in May 2015, Gov. Scott Walker signed into law a measure creating statewide standards, requiring companies to purchase state licenses, conduct background checks on drivers and maintain liability insurance.
Lyft spokeswoman Mary Caroline Pruitt says Lyft has experienced incredible growth in Milwaukee since it launched in April 2014. While Lyft did not have numbers specific to Milwaukee, Pruitt says the service has seen growth in rides and revenue triple since 2015.
Uber spokeswoman Lauren Altmin says Uber, which launched in Milwaukee in February 2014, already has more than 5,000 drivers in the area. “We believe that Uber is a safe, reliable and important alternative to drunk driving. A January 2015 study we conducted in partnership with Mothers Against Drunk Driving (MADD) concluded that people make choices that result in fewer alcohol-related crashes when given more transportation options like Uber,” she says.
According to the study:
In California, Uber’s first market, drunken driving crashes fell by 60 per month among drivers under age 30 in the markets where Uber operates following the launch of UberX, the “low-cost option” for rides. That’s an estimated 1,800 crashes prevented since July 2012.
78% of all respondents agreed that friends are less likely to drive drunk since the arrival of rideshare services to their city.
A 2015 independent study from Temple University found that cities where Uber operates have 3.6% to 5.6% fewer drunken driving deaths than cities without rideshare services.
Examining Milwaukee’s numbers
Milwaukee’s robust summer festival season means big crowds and much insobriety. The summer of 2015 was unlike others, however, in that Summerfest patrons could get free Uber rides if they were new customers and designated pickup and drop-off sites were located at each entrance.
As the largest city in the state with the most bars per capita, Milwaukee presents an important case study for the effects of rideshare on drunken driving. As economics students, Jack Orzepowski and I were interested in learning how ridesharing affected drunken driving in Milwaukee.
We analyzed daily dispatches for operating while intoxicated and reckless driving in Milwaukee from Nov. 1, 2014, to Nov.1, 2015 — a period that included six months before the May 1 rideshare law and six months after. We also, as a control, examined the same period in the previous year.
Daily police dispatches for drunken driving in the city averaged 4.8 per day in the 2014-2015 period and 5.3 per day in the 2013-2014 period. Drunken driving in Milwaukee, however, is more prevalent during the festival season than during the rest of the year. Between May and November, dispatches for drunken driving spiked to more than 16 dispatches per day for the festival season in 2014 and 7.8 per day in 2015.
We find that Uber’s and Lyft’s introduction into Milwaukee has decreased average daily dispatches for drunken driving by 27.69%, or 2.02 fewer dispatches per day on average in the first six months after the rideshare law took effect. This estimate captures only the effect of the May 1 rideshare law and, therefore, might be on the conservative side.
Such a significant reduction in daily dispatches for drunken driving provides relief to law enforcement and allows police to spend their time and limited resources fighting other crimes.
The rideshare model — as compared to the taxi model — lowers costs, makes the process immensely simple and convenient, and can save lives and reduce injury by keeping dangerous drivers off the road. Policy-makers should take note of such a powerful tool to reduce drunken driving and its deadly consequences.
In Milwaukee, a $5 minimum rideshare fare can get me from a downtown hotel to bars and restaurants across the city. For not much more, someone in the suburbs can get a ride in minutes and not think twice about the billing on the way home.
It is difficult to imagine how this process could get any easier. That helps passengers, especially the drunk ones, make good decisions about how to get home safely. And turns out, it serves society as well.
Zack Vrana of Brookfield graduated from Marquette University in January 2016 with a Bachelor of Arts degree in economics.