So what's the model? Put the taxis out of business and then jack up the fares to what the taxis were? Who's winning, then, exactly? Not the consumer...
Use VC money to put taxis out of business then jack up the price and let the service level plummet as cheap immigrants become the drivers.
When cable TV was installed in the UK - thanks to US investment - they dug up almost every pavement in towns and cities nationwide, call centres were local to their customers, the technicians were actual skilled employees who worked in teams of several people.
Jump forward a decade or two. They are deeply in debt. Call centres are outsourced and often abroad. Technicians work for contractors and have nothing invested in the business they represent. If you live a few meters away from a cabled street then there's virtually no chance that they will hook you up.
I personally use Uber because I hate calling a cab company, finding out it does or doesn't have a cab to send, figuring out the address I need it to come to, getting a very general estimate of when it'll be there (8-15 minutes), etc. With uber I drop the pin in the exact spot I want it, I know the minute my cab is there. If cab companies had an app like that, they'd have my business.
The IRS currently allows a deduction of 57.5 cents per mile for business use of a vehicle. That's a ballpark figure for what the fuel and depreciation costs per mile.
I doubt that an electric car is that much cheaper per mile than a gas vehicle, since the battery is very expensive and needs to be replaced after some number of charge/discharge cycles. For a car that's used as a taxi 24 hours a day, you probably have to recharge daily, leading to frequent battery replacement. (A taxi can easily drive hundreds of miles every day - one round trip from midtown Manhattan to JFK airport is around 30 miles).
Even an electric self-driving vehicle requires periodic replacement of tires, shocks, etc. And a vehicle used by the public would probably require at least a daily cleaning of the interior. Plus, you're legally required to carry liability insurance (for damage you cause to other vehicles, people or property). Adding up all these expenses, it doesn't seem possible to break even by selling ads.
* You can't reduce DS expenses. You can offload them to drivers, but that will still be reflected in prices
* You can reduce wage cost by eliminating administrative load by having tools (apps, backends) do the job. Considering the size of Uber they are just transfering wages from operators to engineers.
* You can't reduce wehicle depreciation. You can reduce maintenance costs by having own workshop. Taxi companies might have that, for Uber that would be next to impossible due to practical reasons. You can reduce operating costs by buying fuel/insurance/etc in bulk. Agin, easy for cabs, difficult for Uber (not impossible though).
Personally I think a lot of Uber business model is hidden cost shifting onto the driver and society. Drivers are underestimating the true cost of being a Uber driver and society is losing out via inadequate insurance and tax avoidance. The drivers are not taking out the correct insurance and a lot of them are not declaring their income or collecting sales tax. I guess as long as it is all done on an app then it must be cool and OK.
What matters is passenger miles driven, not total number of unique car sales.
If you open up a new pocket of driving demand because it's easier to get a lift, then the total passenger miles driven goes up. Even more so if it is a pickup/dropoff model with 'empty miles'.
More miles driven->Cars worn out faster->more sales. More sales of likely generic cars less obsessed with expensive annual styling tweaks. More sales -> fewer models -> longer model runs = more profit.
I'd say the car companies are happy.