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Is Uber a substitute for ambulances?

According to a paper by Moskatel and Slutsky (2019), the answer appears to be ‘yes’.

In this paper, we ask whether UberX’s entry into a city caused substitution away from traditional ambulances for low‐risk patients, reducing overall volume. Using a city‐panel over‐time and leverage that UberX enter markets sporadically over multiple years, we find that UberX entry reduced the per capita ambulance volume by at least 6.7%.

I key question is why would Uber be a substitute for ambulances. In most cities, taxis existed. Thus, Uber may be more convenient and cheaper, however, (i) even if they are cheaper than taxis, taxis are still almost certainly much cheaper than an ambulance, (ii) it is unclear whether Uber arrival times are much faster than taxis.

A key benefit of Uber relative to taxis is that the level of uncertainty falls. Even if taxis were the same price and came as quickly (on average) as a taxi, Uber would still be more valuable. If you need an ambulance, the key time is not only how long it will take on average, but also what is the probabilty this will take a very long time. With app-based ridesharing, you can be sure within a minute or two of when you would arrive at your destination. For taxis, there is much more uncertainty. Thus, patients who need an ambulance could check how long Uber would take and if it is too long then call an ambulance. For a taxi, that is not possible if people do not believe dispatchers will be sufficiently precise in the time to arrive amounts.

There is likely another benefit. Uber likely substituted for less life threatening incidents. Because of this, that means that there will be more ambulance capacity for life threatening diseases. There is a long-run potential equilibrium where ambulances exit the market and it is actually harder to get an ambulance in the long-run, but in the short-run Uber may have spillover benefits.


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