A few companies won out, consolidation happened, unprofitable routes were dropped and prices rose on profitable routes to a level where bus riders could be more reliably tapped for profits - largely by monopolies and duopolies.
it's beautiful when it works.
So they're offering prices below cost and that is considered "predatory"? Last time I checked low prices are good for consumers
Yes, and the people on the other side of that debate are perfectly reasonable, dispassionate truth-seekers.
Search for the truth is about collecting and reviewing evidence. Being passionate (synonym of ardent) about one side (rather than possibly the inquiry itself) is a bad quality.
The idea that predatory pricing not only exists, but is prevalent, is the main plank of the argument that competition doesn't work and wont generally sort out bad behaviour in the market, so lots of people who ideologically need that to be true cling very dearly to that idea. On the other side of the debate are a lot of people with an incomplete appreciation of the complexity of what markets can and can't sort out, especially the pretty non-ideal ones we're stuck with in a world where among other things governments and regulations play, for better or for worse, a non-trivial role.
Lost in this mess is any nuanced discussion of when predatory pricing might and especially might not occur.
And now we're getting to the point. A reasonably free market for taxis (and a such can well include requirements for insurance, background checks and rigorous book keeping) will not allow predatory pricing to occur, and this is trivially easy to show. This does not mean that predatory pricing doesn't or can't exist, just that it certainly can't on a market with these characteristics.
The low-barrier-to-entry nature of this market is pretty much perfectly suited for market conditions to prevail and ride prices to stabilize quite near their costs.
If so, that is indeed then a normative observation, and it's also a pretty silly argument. Thus, my incredulity that is actually the case. I'd be interested in knowing what, then, their argument actually was.
Okie dokie, forget what I said. Sorry.
But as others have said, unless barriers are put in place (economically natural like mindshare or opportunity cost or artificial ones like bribed legislation) the monopoly can't abuse their situation without opening up avenues for new competition to arise to compete with them.
On one hand, capitalism is obviously not optimal - a monopoly is only held to a price ceiling of what the most nascent newcomer is capable of. They are almost always able to take home the profit of their scale and integration even in the presence of competitors. On the other hand, the only way historically nations have battled this is to micromanage a market to guarantee enough strong entrenched and scaled competition to keep there from being a decisive market leader. But over time all markets trend towards that kind of centralization.
so there shouldn't be any startups then?
because every startup is unsustainable at the beginning. every startup wants to beat its competition and emerge as the sole winner. every startup wants to raise prices and make more money.
capitalism is an economic system where individuals own (and deploy) the means of production, not the state. capitalism employs competition to ensure those means of production are put to productive uses for the whole economy, not just the individual. profits (or more directly, the accumulation of wealth) are non-productive until redeployed.
that's exactly the way capitalism is designed to work.
With the idea that they will eventually become sustainable. And let's not pretend that manu (most?) startups are a massive cash sink-hole run by people who don't really know what they're doing. Regardless, if your startup's plan is to start cheap, grow their user base until they have a network effect, and then raise their prices significantly _and_ the product they offer can be easily replicated... then yes, that startup should probably not exist.