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Unfortunately for them, this is a thing: https://en.wikipedia.org/wiki/Price_elasticity_of_demand https://en.wikipedia.org/wiki/Price_elasticity_of_demand If i

• GCA10 9y ago
  Cab companies have been raising fares for a long time without losing much business. Bus companies, too. Yes, a 30% or larger price increase vs. the competition will cost you a lot of business. But existing transit providers get away with smaller increases with impunity. If Uber is 10% away from breakeven, it can probably close that gap in stages without ruinous consequences from demand elasticity.
  • chadash 9y ago
    I agree that a 10% price increase may not make a big difference, but as far as the comparison to cab companies raising prices, I think that Uber has a fundamental difference in that many people use it far more frequently than they ever used cabs in the past. I now own two cars (between me and my wife), but there was a period last year where I was living relatively close to my office and using uber relatively frequently instead of owning a second car. I did the math and it boiled down to Uber/Lyft being cheaper than a second car, even if I used it relatively frequently. Five or six years ago this wouldn't have even been an option, and I would have just bought a car, since traditional cabs just aren't as convenient. My point is that many people use uber in their day to day life, such that they pay close attention to pricing. Traditional cabs are something that I used almost exclusively on vacation (and still do in places with uber), so I am much less cost conscious on those.