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It's called dumping. You have artificially low costs temporarily in order to put competitors out of business. Once that's achieved, you then increase prices. I

It's called dumping. You have artificially low costs temporarily in order to put competitors out of business. Once that's achieved, you then increase prices. I'm actually not sure how dumping would work when done by Uber, though. Individual taxi drivers will go out of business, but there's little barriers to entry to new taxi drivers starting out again once Uber starts to flex its pricing power. Of course the picture changes if Uber starts to lobby for regulatory protection. You have to look at the micro details of the market to see whether there's a problem there.

temp-dude-87844 4y ago
Bigger cities typically regulate taxis and sell licenses to operate to taxi companies, who then employ or contract the drivers. Uber was always an unlicensed taxi scheme. Their planned business model was to ignore the law to reduce costs, then sell rides below cost until everyone else is out of business.
- hackerlight 4y ago
  That law is classic regulatory capture and anti-consumer, though. I have no problem that bad laws which are hostile to people are being broken.
  - mschuster91 4y ago
    > That law is classic regulatory capture and anti-consumer, though. Taxis are usually regulated by law to provide mandatory service to an entire area at the same tariff - no discrimination based on the time of the day, the source or destination (e.g. "surge pricing" for events or effectively no service in poor neighborhoods), or if the passengers have any sort of disability. When the regulated option goes out, a lot of people suddenly live at the whims of capitalist overlords and AI algorithms, but not under the rule of law any more.
milsorgen 4y ago
Unless it's changed over recent years my understanding is that in many cities there was a high barrier to entry for taxis in the form of licensure. In some cases only a finite amount, causing sky rocketing prices. From what I've read it's similar to how some areas in the US have limited alcohol licenses (usually a per capita system in that case iirc), often they are then auctioned off for higher and higher prices where permissible.

temp-dude-87844 4y ago

Bigger cities typically regulate taxis and sell licenses to operate to taxi companies, who then employ or contract the drivers. Uber was always an unlicensed taxi scheme. Their planned business model was to ignore the law to reduce costs, then sell rides below cost until everyone else is out of business.

hackerlight 4y ago
That law is classic regulatory capture and anti-consumer, though. I have no problem that bad laws which are hostile to people are being broken.
- mschuster91 4y ago
  > That law is classic regulatory capture and anti-consumer, though. Taxis are usually regulated by law to provide mandatory service to an entire area at the same tariff - no discrimination based on the time of the day, the source or destination (e.g. "surge pricing" for events or effectively no service in poor neighborhoods), or if the passengers have any sort of disability. When the regulated option goes out, a lot of people suddenly live at the whims of capitalist overlords and AI algorithms, but not under the rule of law any more.

milsorgen 4y ago

Unless it's changed over recent years my understanding is that in many cities there was a high barrier to entry for taxis in the form of licensure. In some cases only a finite amount, causing sky rocketing prices. From what I've read it's similar to how some areas in the US have limited alcohol licenses (usually a per capita system in that case iirc), often they are then auctioned off for higher and higher prices where permissible.