Calling Ubers taxis seems a bit off to me. They are both transportation, but really not the same service. Have you ever tried to hail a cab while stuck on a str

Calling Ubers taxis seems a bit off to me. They are both transportation, but really not the same service. Have you ever tried to hail a cab while stuck on a street corner for 30 minutes? Ever tried to phone for a cab just to wait an hour? Ever see a line of cabs at a taxi stop just waiting for customers when there are no customers in sight? The app and algorithms provide enough optimization that the cars are exactly where they need to be to prevent drivers and passengers from waiting too long. That changes the cost to deliver the service (as does using private vehicles instead of fleet vehicle, though that may be more of an externalization than a reduction). As you say, taxies are low margin businesses. If Ubers manage to have even lower expenses than taxies, they choose to continue charging less. Uber has always gotten a nonlinear amount of increased business as a result of its lower price.