Cheers – Part Deux
We live in uncertain times – at least as far as politics and economics is concerned and as I have shown before, the go-to remedy to deal with these uncertainties for many people seems to be alcohol. Obviously, alcohol as a means to deal with feelings of anxiety is not popular everywhere. In the United States, there are large differences in the prevalence of alcohol consumption from state to state with Utah having the lowest rate of drinkers for religious reasons. On the other hand, people living in states with a colder climate and longer winters tend to drink more than people who live in states with a warmer climate. However, what causes people in Colorado to drink that much is a mystery to me.
Prevalence of drinking alcohol in the United States
Source: CDC.
Drinking alcohol is all fine and well as long as you don’t get into a car afterwards to drive home. And this is where Uber, Lyft and other ridesharing services have a significant benefit. Using the gradual expansion of ridesharing services across the United States, it is possible to show that with the introduction of Uber or Lyft in a city, the rate of traffic accidents due to drunk driving declines by about 10% for an annual cost saving for the US economy and health care system of about $4.6 billion.
However, nothing is as simple as it seems at first hand. While Uber and Lyft allow people to have a drink and not drive home drunk, it also invites them to have more drinks than they would have had otherwise. Another study looked at the alcohol consumption of people in cities where UberX was introduced. And to nobody’s surprise, the introduction of UberX led to higher incidents of drinking, more frequent drinking and once people had a drink, they drank more. Alcohol consumption increases by 3% to 5% depending on the measure you use after UberX is launched in a city. The effect is even more pronounced if UberX is launched in a city with miserable public transportation (i.e. where people had to rely on their cars before Uber and could not use buses or trains). If the 10 cities in the United States with the best public transportation system are exclude, then the maximum number of drinks consumed increased by almost 10% after the launch of UberX.
The problem is that increased alcohol consumption has long-term negative health effects. The Center for Disease Control (CDC) estimates that alcohol consumption cost the US economy about $249 billion in 2010 and about three quarters of these costs were due to binge drinking. If the incidents of alcohol consumption increase by about 3% after the introduction of UberX and the incidents of excessive drinking by about 10%, then the additional costs for the US economy of UberX can be as high as $24 billion or about six times as much as is saved due to fewer incidents of drunk driving.
Cheers!
Change in alcohol consumption after the launch of UberX
Source: Burgdorf et al. (2019).