There's a lot of snarky answers, but some things off the top of my head why Uber can be cheaper: * More efficient (less down-time driving around) * People

There's a lot of snarky answers, but some things off the top of my head why Uber can be cheaper: * More efficient (less down-time driving around) * People use their own cars (no need to buy/maintain taxis) * Less overhead (no need for managers, dispatchers, etc) * No taxi medallions * More popular, so more rides * Subsidized by VC money (Okay, kinda snarky, but legitimate) The last point about subsidization sounds bad, but their goal is (likely) to just get enough market share that they've already won by the time self-driving cars come out (and can cut costs significantly then).