Ride-Sharing, Fatal Crashes, And Crime

Angela K. Dills
Providence College

Sean E. Mulholland
Stonehill College – Department of Economics

May 31, 2016

Abstract:

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. Conversely, we observe an increase in vehicle thefts.

Ride-Sharing, Fatal Crashes, And Crime – Introduction

The advent of smart-phone based, ride-sharing applications has revolutionized the vehicle for hire market. An alternative to traditional taxi and limousine services, ride-sharing applications, such as Uber and Lyft, enable potential passengers to ‘hail’ nearby private drivers via geolocation. Potential passengers and drivers both broadcast their locations, quickly map the distance to one another, agree on a price, and estimate the likely wait time. Although matching drivers to potential passengers in real-time provides a greater ease of service, this innovation has encountered much scrutiny (Rogers, 2015). Much of the scrutiny stems from the lack of state and municipal safety regulations that are required of ride-sharing’s competitors: traditional taxis and limousines.

With little to no regulation, ride-sharing passengers, as well as pedestrians and occupants in nearby vehicles, may be subject to a greater risk of injury from driver error or part failure. The use of smartphone applications by drivers and increases in the number of passengers per vehicle potentially increase driver distraction. The increased interaction of non-government certified drivers and passengers may result in greater violence. On the other hand, these applications reduce passenger wait times and may encourage some drowsy or intoxicated potential drivers to ride instead (Rayle, Shaheen, Chan, Dai, and Cervero 2014). Yet, this ease of use might also increase alcohol consumption and other risky behavior. All of these behavioral responses affect the risk of vehicular crashes and crime.1 What is unknown is the direction and magnitude of these effects. Therefore, we investigate whether the introduction of the ride-sharing service, Uber, is associated with net changes in vehicular fatalities and arrest rates.

To do so, we first use monthly data from the National Highway Traffic Safety Administration’s Fatality Analysis Reporting System (FARS) to study whether Uber’s entry is associated with changes in the overall rate of fatal automobile accidents. We also examine three related measures: alcohol-related fatal crashes, night-time fatal crashes, and the number of vehicular fatalities per 100,000. Using a differences-in-differences specification, we find that fatal accident rates generally decline after the introduction of Uber. Specifically, in the unweighted regressions, we find that entry is associated with a 6 percent decline in the fatal accident rate. Fatal night-time crashes experience a slightly larger decline of 18 percent. 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 percent decline in vehicular fatalities.

Next we use the Federal Bureau of Investigation’s Uniform Crime Reporting (UCR) program to explore whether the introduction of Uber is associated with changes in arrests for particular types of crime: aggravated assaults; other assaults; motor vehicle thefts; driving under the influence (DUI); drunkenness; and disorderly conduct. Again employing a differences-in-differences specification, typically with county-specific trends, we find a large and robust decline in the arrest rate for DUIs. Depending upon specification, DUIs are 15 to 62 percent lower after the entry of Uber. The average annual rate of decline after the introduction of Uber is 51.3 percent per year for DUIs. For most specifications, we also observe declines in the arrest rates for non-aggravated assaults and disorderly conduct. However, the arrest rates for motor vehicle theft increase.

In the following section, we discuss the possible relationship between ride-sharing, fatal traffic accidents, and a variety of crimes. In section III, we present our data on entry, accidents, and crime. In section IV, we present our difference-in-difference empirical strategy. We reveal our estimation results in section V and then conclude in section VI.

The interplay between transportation, traffic accidents, and crime

Much heat has been generated and ink spilled over the effects of ride-sharing. Although ride-sharing existed long before the advent of smart-phones, ride-sharing exploded when innovators such as Uber’s Travis Kalanick and Garrett Camp and Lyft’s Logan Green and John Zimmer began using the geolocation function of smart-phones to match private drivers with potential riders. These applications also enabled ride-sharing services to instantaneously alter prices in response to changes in supply and demand. By using geolocation, introducing more flexible pricing, and encouraging automated payments, ride-sharing services offer greater convenience and shorter wait times than other point-to-point transportation options. Many, dare we say, hail these innovations. Others, including taxi and limousine owners and drivers, note the potential safety risks to such unregulated ride-sharing services.

To determine whether the lack of oversight has exposed citizens to greater harm, we investigate whether the introduction of Uber’s ride-sharing service is associated with changes in vehicular fatality rates and arrest rates. The advent and expansion of ride-sharing services may affect traffic accidents and crime rates through a variety of mechanisms.

One potential downside to ride-sharing is increased traffic accidents. This may happen for a variety of reasons: changes in the number of vehicles on the road; changes in rates of distracted, drowsy, or drunk driving; changes in the quality of drivers; and changes in the quality of vehicles.

Ride-sharing services may increase the total number of vehicles on the road, leading to more congestion and a greater probability of collisions. Those calling for increased regulation note that county or municipal restrictions typically limit the number of taxis and limousines. Expanding the number of vehicles providing point-to-point transportation may increase vehicle miles traveled and the per capita incidence of vehicular accidents. In contrast, ride-sharing may substitute for driving oneself and lead to no change in vehicles miles traveled.

Second, ride-sharing may change the likelihood of driving while distracted, drowsy, or drunk. Distracted driving likely increases. Passengers are often cited as the greatest source of distraction (NHTSA 2014). By increasing the number of private drivers with passengers, ride-sharing may increase the fraction of distracted drivers. In addition, using any type of phone based application, whether hands free or not, likely increases the level of distracted driving.3 When a potential rider electronically hails a driver, the Uber application alerts a driver by sound, but the driver must then determine the time and distance to the potential rider. Interacting with potential riders via the smart-phone application is clearly driving while distracted.4 This distraction increases the probability of a crash and lowers the safety of passengers as well as nearby drivers and pedestrians. Drowsy and drunk-driving, however, may decrease. In many locations, ride-sharing applications have larger

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