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Comment by eberkund | Hacker News Reader

But how is that any different than Uber? IMO people are going to be in for a real wake-up call when these companies finally kill traditional taxi company and there is a massive rate hike. Right now everyone loves Uber because they are cheaper than the equivalent Taxi ride but that is only because they are operating a massive loss and do some shady things with the way they hire and pay drivers.

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> But how is that any different than Uber?

Because they have a lot more money and will remain standing as an independent entity. Prices will either rise, or Uber will remove costs via autonomous driving (they're hoping to get there before they have to hike prices, because if they get there in time, it becomes a very difficult to overcome moat and they win).

Amazon nearly went bankrupt on their hyper thin margins early on. Had the dotcom bubble popped just a bit sooner, they'd have gone under. They were bleeding red ink trying to get to scale before the easy money ran out. Uber is trying to do a similar thing, fortunately for them the asset bubble party has continued on long enough for them to raise a vast warchest of cash.

Prices likely won't go up when taxis are gone. Uber doesn't consider taxis to be a competitor. Uber is trying to compete with car ownership. Liquidity begets liquidity. This is why marketplaces like stock exchanges and Amazon are natural monopolies.

The best thing is, if any of these ride sharing services raise prices too high, taxis will return. In comparison, they are cheap to start and operate.

So if prices don't go up, and prices are only held artificially low by burning VC money, what happens to the company? I'm not seeing an end-game that isn't "VCs pull out" or "prices go up".

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