This is a relatively ahistorical, naive view of the operation of markets. Even with competition, assuming fixed price cabs eventually get driven to extinction,

This is a relatively ahistorical, naive view of the operation of markets. Even with competition, assuming fixed price cabs eventually get driven to extinction, then what? There would be nothing to stop the collusion of existing market competitors (Uber, Sidecar, and Lyft) in order to drive up pricing or perform market division (customer allocation) - that is assuming that monopolies don't begin to form in the market as they are liable to do. There is tremendous incentive and pressure from investors for them to both divide markets and fix prices (eg, maximize profit). New firms may enter the market in an attempt to undercut these forces, but they will likely be unable to compete with monopolized pricing by the large companies and thus be driven out of business before reaching any sort of reasonable scale. These kinds of phenomena, far from being anomalies, are the traditional way in which really existing markets work [1][2][3][4][5]. Ultimately, the resolution of such problems occurs not through the markets - which instead create such problems - but instead through the mobilization of state forces (eg. lawsuits and monopoly busting). This article just highlights the strong potential for these problems and more to form in the developing taxi service market some time in the near future and the algorithmic obfuscation used to give these forces the appearance of neutrality and legitimacy. [1]: http://www.fbi.gov/news/stories/2013/september/guilty-pleas-show-high-cost-of-price-fixing-in-auto-industry http://www.fbi.gov/news/stories/2013/september/guilty-pleas-... [2]: http://en.wikipedia.org/wiki/Sherman_Antitrust_Act http://en.wikipedia.org/wiki/Sherman_Antitrust_Act [3]: http://www.theverge.com/2014/2/1/5368098/apple-hit-with-840-million-damages-claim-in-ebooks-lawsuit http://www.theverge.com/2014/2/1/5368098/apple-hit-with-840-... [4]: http://www.tomshardware.com/news/microsoft-office-price-fixing,7533.html http://www.tomshardware.com/news/microsoft-office-price-fixi... [5]: http://en.wikipedia.org/wiki/Price_fixing_cases http://en.wikipedia.org/wiki/Price_fixing_cases