Brad Polumbo – September 14, 2021
It’s crazy how quickly we start to take things for granted. I was in Rapid City, South Dakota for a conference last week, and for the first time in recent memory, Uber and Lyft were not readily available. The ensuing struggles that attendees had navigating the small city were a funny example of #FirstWorldProblems. (Nine of us crowding into a minivan that served as the “airport shuttle” was a funny sight, indeed). Yet it was also a poignant reminder of how much we’ve come to rely on the valuable services offered by relatively new ride-sharing technology.
But new research illustrates that ride-sharing services like Uber are more than just convenient—they have literally saved thousands of lives.
A study by two economists at the University of California, Berkeley examined the impact that Uber, specifically, has had on alcohol-related traffic deaths and total traffic deaths in the US. They sought to investigate a simple question. By providing people with a safe, convenient, and relatively inexpensive alternative means of transportation, would Uber reduce drunk driving and traffic deaths?
According to their findings, the answer is a resounding yes.
Uber has reduced alcohol-related traffic fatalities by 6.1 percent, the study finds, which equates to roughly 214 lives in 2019. Similarly, Uber reduced overall traffic deaths by 4 percent, likely by reducing other forms of dangerous driving such as driving while very tired. This equates to 494 lives saved in 2019. (And that’s just Uber: To understand the full life-saving impact of ride-sharing technology, we would have to factor in competitors like Lyft, too).
Extrapolating this data across multiple years, we’re left with the inescapable conclusion that Uber has saved thousands of American lives. This life-saving effect translates to $2.3 to $5.4 billion in economic benefits for consumers.
However, there’s a bigger takeaway here than the simple fact that ride-sharing services are awesome. These heart-warming results are another reminder that the lawful pursuit of profit in a free market is not actually a bad thing, but rather, leads profit-seekers to help all of society.
Progressive politicians and left-leaning critics have routinely bashed Uber as a “greedy” and “exploitative” company, and otherwise campaigned for its regulation and restriction. It is, of course, true that the people who run Uber and other ride-sharing services want to make money. That’s why they went into business. But pursuing profit doesn’t mean a company is working against the public’s interest.
The reality of Uber offers a stark contrast. It shows us how a company desiring large profits in a free market must meet a pressing societal need and uplift millions of others. Indeed, this new study finds that the life-sharing benefits Uber has achieved for society alone likely match the profits the company has received through its enterprise.
And Uber is hardly an exception on this front. As economist Donald J. Boudreaux explained, studies show that “producers, on average, capture a mere 2.2 percent of the total benefits of their successful introduction into markets of technological advances. A whopping 97.8 percent of those benefits are enjoyed by [consumers].”
With that said, there are bad forms of “profit,” too.
When companies profit by colluding with the government to block their competitors or by lobbying for taxpayer-financed subsidies, that kind of “profit” does not advance a social good. Amazon lobbying for a $15 minimum wage and corporate tax hikes it knows its smaller competitors can’t afford is a prime example. (Pun intended). Economists distinguish this from the quest for market profits by referring to it as “rent seeking.” Similarly, “profit” pursued through fraud is also obviously problematic.
Yet it nonetheless remains true that when markets are free, the pursuit of profit and success requires meeting a societal need. In the case of Uber, the pursuit of profit has meant more than just providing millions with convenient transportation—it has saved thousands of lives.
Remember that the next time you hear critics of capitalism rail against “greed” and “profit-seeking.” In fact, the very virtue of free markets is that they harness the self-interest inherent in human nature and channel it to address societal needs.
Composite Image By FEE | Image Credit Flickr | CC via 2.0