Uber and it's competitors are "dumping" their services, trying to kill their opponents before they run out of money. When only one survives, they'll raise prices to try to break even.
Platforms win out because of user familiarity, not because they're necessarily the cheapest option.
Uber had and still has a large lead on Lyft. They get free advertising all of the time through the media. How difficult is it to accept that you're not going to be number one in every market (but you'll likely remain number one in most markets), spend money wisely to shore up your position when necessary, and do everything you can to stay profitable?
Unless if I'm looking at the wrong numbers, they're literally killing themselves on sales, marketing, and driver incentives.
It's "stupid" that's killing them, not the dynamics of the ride share market.
They are locked into a classic problem for 2 sided markets with low barriers to entry.
My observation is that, yes for the general public there may be only "Uber" or traditional taxis, but those are the people that never use it in the first place.
> Platforms win out because of user familiarity, not because they're necessarily the cheapest option.
Uber is not a platform for the user. It is a service for basic transportation that costs money, and all car hailing apps offer similar enough experiences with different price tags depending on how fast the company is throwing money away.
The barrier to entry in ride sharing business is so low it's almost non-existent, which makes the whole strategy pointless, unless they can lobby in Congress for some regulatory framework that would make starting a new ride-sharing business harder.
Which would presumably mean they've spent billions to go round and end up exactly where we started? Which is presumably what will happen with a lot of the 'disruptive' companies once public opinion and regulation catches up with them.
There are user costs to switching platforms, even if the platform is a ride sharing app. I get that the friction is less than something like Facebook, but an amount much, much smaller than 23 billion would have been enough to 1.) have the best app on the market and 2.) advertise/discount where necessary to maintain some market share.
If your customers have an unsustainable business model and you have favorable unit economics and a market leading position, you can quite literally sit on your cash flow (good unit economics and low overhead lets you survive market share losses) and wait until everyone else goes out of business.
Also: you don't need to have "the best app in the market", just a reasonably good one. Advertising cost is more of the issue, but you can do that by starting in one local market, get some market share and use it to attract more VC capital.
I don't know if it's worth as many billions as it's cost so far, but it's not nothing. This is being done because a monopoly of this type is NOT so easily busted by some bright spark 'disruptor'. If nothing else, you can spend a few more billions buying whispering campaigns suggesting that the new 'disruptor' is unsafe or tainted, or simply attack them more directly, terrorize their drivers, whatever.
Even without such black tactics the notion of frictionless liquidity in market dynamics is foolish. It doesn't work that way.