As with any independent contractor, the market sets the rate. Uber is just a really efficient marketplace since an Uber ride is a complete commodity with no specialization.
They kinda do, by not accepting rides under a certain price and forcing a raise, like it has been reported.
> Furthermore, prices are driven down artificially by investors who are willing to take a loss until other "markets" are forced out of business, at which point Uber will presumably raise its prices to actual taxi market rates.
This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market.
Yes, kinda. My understanding is that once they're "on the clock", they get penalized for declining too many rides.
> This will never happen. Anyone can start a ride-sharing service with a tiny investment. There's no way bankrupting current companies will give Uber an unassailable market.
Except any startup will be forced to either price their rides above the cost of service, or find investors willing to take a loss in order to undercut the former.
Uber may not ever have an unassailable market, but they will have to eventually raise their prices or lower the cost of providing rides.
Also "markets" doesn't necessary mean ride-sharing markets, they can also destroy public transport and other new ways of transportation that doesn't fit well to Uber model.
(Pardon my ignorance if these are dumb questions...)
> And why shouldn’t we consider investors part of the market?
We can, but there are rules of "fair play" to the market that are supposed to be followed. What Uber is doing with SV money is, in saner sectors, called dumping, and generally considered illegal. Somehow it isn't, and even if it was, it probably wouldn't do much, as Uber's whole "rideshare" operation is illegal almost everywhere they run it.
They keep undercutting Uber, should Uber ignore that? Besides, Uber doesn't set prices significantly below the competitors, it relies on being a superior service with lower wait times and higher vehicle utilization. If you open Uber and Lyft you will typically see very similar prices, with the main difference that Uber can be lower because they are a more efficient service, but Lyft will make up for this by subsidizing rides even more than Uber (something you can see very clearly in their S-1 and quarterly earnings reports).
I won’t address the rest except to say that’s more a factor of them expanding into other markets or maintaining category position than efficiency.
>The market says Uber should be going out of business
The market isn't saying Uber should go out of business or it would have gone out of business. The market is saying Uber should be aggressive about pricing until Uber's competitors stop subsidizing their rides. Investors are part of the market too.