The simplified two step plan is a) subsidize the cost until the market share is big enough followed by b) once you have market share, use your weight to up the

The simplified two step plan is a) subsidize the cost until the market share is big enough followed by b) once you have market share, use your weight to up the cost to a healthy margin. If you overestimate your ability to actually do (b) you are going to have a bad time. You are squeezing both drivers and riders in the uber case, but both of them have other options - if they bail on you, you'll probably have to raise pay/drop fares to counteract it. There is no guarantee the business model actually works at the scale you wanted it to.