The medallion system was a significant barrier to entry. Uber used the carpooling loophole as the thin end of a large wedge to exploit regulatory arbitrage. Th

The medallion system was a significant barrier to entry. Uber used the carpooling loophole as the thin end of a large wedge to exploit regulatory arbitrage. The 100% "independent contractor" driver workforce lets them skirt minimum wage laws, vehicle costs, unemployment costs, worker's compensation, Social Security tax, etc. They intentionally flood the market with drivers so customers only have to wait 5 min. Many drivers eventually learn that it's only profitable to drive during high demand times, within urban cores. Logging in during the work day, or in the suburbs simultaneously reduces revenue and increases mileage and time costs. Transportation networks have a fundamental trade off between quality of service and total area serviced. Cellphones existed before, but not with the ability to install a non-carrier blessed app, with GPS functionality (again keeping wait times down).