Is Drinking and Driving Finally Going to be OK?

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Drinking and driving kills — 10,265 people annually, to be exact. Of the 1,132 traffic deaths among children ages 0 to 14 years in 2015, 209 (16%) involved an alcohol-impaired driver. That’s 209 children who die every year due to drunk driving. Not a good look for the liquor industry.

Drunk driving is one of the biggest deterrents to drinking out there. Which is why the liquor industry has major incentives to distance its product from one of the most prevalent causes of early death in the U.S. For one, drunk driving acts as a deterrent against consuming copious amounts of alcohol (if any), which hurts sales. But it has consequences that reach beyond just people choosing not to order wine with dinner: many states have imposed limits on where and when people can buy alcohol with the intent of reducing drunk driving. These sanctions take a hefty cut out the liquor industry’s sales — and probably wouldn’t be as prevalent if drinking and driving were not an issue.

Until now, though, the liquor industry stood on pretty shaky ground when it opposed these measures. Enter: self-driving cars.

Uber and other autonomous vehicle players have a new partner in crime: the American liquor industry. This year alone, two liquor industry groups have joined forces with coalitions that are lobbying to turn fully self-driving cars into a reality. The Wine and Spirits Wholesalers of America, a group that represents almost 400 U.S. alcohol brokers joined the Coalition for Future Mobility, which lobbies for self-driving cars. In the same week, the Foundation for Advancing Alcohol Responsibility signed on to support a pending bill that would expedite the commercialization of autonomous vehicles. The Foundation’s members include Bacardi, Pernod Ricard, and Constellation, three of the largest alcohol producers in the U.S.

A NewtonX February 2018 Survey with former employees at Uber Elevate, GoogleX, and four different alcohol producers, including Heineken and Pernod elucidated three reasons why the liquor industry would want to encourage adoption of self-driving cars:

  1. Studies show people drink more when they don’t have to worry about drunk driving
  2. Drunk driving informs policy in certain states that discourages drinking
  3. The liquor industry can establish points systems and partnerships with bars and AV ride-share companies that would be enormously profitable

Elimination of Drivers Could Boost Sales By as Much as $220B

According to government data, drinking and driving accounts for nearly one-third (29%) of all driving-related accidents in the U.S. Every single day, 28 people in the country die because of a drunk driver. This is not only a bad look for the liquor industry, it also disincentivezes heavy drinking — a positive outcome for health, but a negative outcome for the liquor industry.

A NewtonX panel member and former SVP-level executive at Pernod pointed out that when D.C. metro extended its hours, DUI arrests in nightlife areas close to transit stops decreased. Interestingly, though, a side effect of the D.C. metro hours extension was that late night arrests for minor crimes in those same areas increased — likely due to increased drunken late-night activity. The study concluded that late night transit increases drinking, but that this alcohol consumption is still safer.

In fact, if you assume that every single member of the American drinking population will consume one additional drink per month as a result of not being concerned over drunken driving, that would increase the market by half a billion. Globally, the market would expand by 30 billion. And that’s from just one additional drink per month. NewtonX panel members agreed that when autonomous vehicles are fully implemented around the world, global alcohol consumption, both at bars and in-home, has the propensity to boost sales by as much as $220B.

Self- Driving Cars Could Extend Alcohol Sales Hours

Historically, districts and states have either raised alcohol taxes or limited the density of bars and liquor stores to prevent drunk driving. Only nine states have unlimited hours of sale for on-premises alcohol outlets. Numerous scientific reviews have concluded that restricting hours reduces alcohol consumption and related harms (including drunk driving). From the perspective of the liquor industry, this is bad news: states that have high alcohol consumption, and therefore high related harms, have strong incentives to limit sales.

If self-driving cars were to eliminate drunk driving, this would remove much of the incentive for limiting sales hours (the other major incentive is religious — only seven states do not restrict Sunday sales). A study of New York City found that the introduction of Uber and Lyft resulted in a 25-30% decrease in alcohol-related car crashes (or 43 fewer crashes per month), and if liquor companies could prove that the advent of self-driving cars would eliminate this effect of drinking, many of these states would likely loosen policy around liquor sales.

Partnerships and Points: The True Market Opportunity for a Liquor Industry and Self-Driving Car Team

The NewtonX panel strongly emphasized that much of the $220B opportunity from self-driving cars comes from potential partnerships. “Think of how Uber has already partnered with credit cards, so that users can earn points through a certain card and redeem them through Uber,” said a former member of Uber Elevate. “Now apply this same concept to bars, liquor stores, and even liquor delivery services.”

Self-driving car providers could even establish partnerships where, for instance, if customers go to a certain bar and meet a drink minimum, they get a free ride back home from the bar. These could also extend to restaurants, liquor stores, and even grocery stores. “You could even see a self-driving car provider partnering with Postmates to arrive with a meal or a drink that you can eat on the way to your destination,” posited a member of the NewtonX panel.

Does the Liquor Industry Have What it Takes to Make Self Driving Cars a Reality?

“Eliminating drunk driving is something that everybody can get behind,” declared a previous executive at Uber Elevate. “You have very powerful organizations with no shortage of money, all working toward the same goal, and it’s very likely to make an impact on policies and bill creation.”

While the irony of this lobbying is rich — encouraging people to engage in unhealthy, excessive drinking by lowering the risk of death through driving — it is also decidedly capitalistic. The liquor industry has money and power, which it could use to mobilize US policymakers, and even sway public opinion through advertising campaigns. And despite the industry’s motives, this change will have a positive impact on society as a whole.

 

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