What Uber is doing here should absolutely not be allowed. Whenever you go to a city where Uber is in it's first year of operations the prices are insanely low. This also happens when Uber launches a new product like Pool. This enables them to crowd out any competition and then raise prices once they've got control of the market.
I have a friend in SF who takes Uber to work every day. It's about 3.5 miles. I assumed he was dropping boatloads of money but he told me it's $2.50 each way! The IRS estimates vehicles costs alone at about $0.55 a mile and that's not including actual pay to the driver and Ubers cut. Offering a service at this price is not only unfair to for-profit competitors but messes with public transport as well. It's using VC money to crowd out the market.
Unlike with cloud services (the other example) it's much harder for competition to Uber to reappear once it's disappeared. There's a fixed supply of willing drivers and big network effects at play.
I have a friend in SF who takes Uber to work every day. It's about 3.5 miles. I assumed he was dropping boatloads of money but he told me it's $2.50 each way! The IRS estimates vehicles costs alone at about $0.55 a mile and that's not including actual pay to the driver and Ubers cut. Offering a service at this price is not only unfair to for-profit competitors but messes with public transport as well. It's using VC money to crowd out the market.
Unlike with cloud services (the other example) it's much harder for competition to Uber to reappear once it's disappeared. There's a fixed supply of willing drivers and big network effects at play.