You are assuming perfectly rational market. It isn't.
Many people here would dodge Uber if they expect surge pricing (And something along these lines was said today on one of the popular for young people radios stations, here).
Also, there are plenty of taxi just waiting around everywhere downtown.
Many (older?) people, would never get Uber to go to the airport, which is a very good profit opportunity.
So, I don't see Uber having a 100% monopoly in any future, as various people have various needs and opinions and it's not a race to the bottom on price in this segment.
They will both coexist, but for people taking the cab in the first place, $0.75 is not even on the list of thoughts in downtown Toronto. You get out of a Johny Cash event, $200 a person ticket, it's snowy, and you'll wait few minutes for uber when the Taxis are parked up front?
As you move outwards from the core, more people drive Uber, and one was even my ex coworker, so he told lots of stories.
So, to conclude, you can't assume race to the bottom on price alone. Or IPhones, rolexes, Alienware PCs, etc would have been long gone.
> Many people here would dodge Uber if they expect surge pricing
Notice that they've stopped displaying the surge price multiple on their hail screen. Previously I would have hesitated at 1.4x surge, but now "fares are slightly higher due to increased demand" just makes me shrug my shoulders.
You misunderstand me. That's the verbiage they display now. "fares are slightly higher due to increased demand", rather than the actual surge multiplier. If the surge multiplier is higher than that, it'll say something to the effect "fares are a lot higher due to high demand". It doesn't tell you the exact multiplier anymore, which makes me at least a bit more price insensitive.
Many people here would dodge Uber if they expect surge pricing (And something along these lines was said today on one of the popular for young people radios stations, here).
Also, there are plenty of taxi just waiting around everywhere downtown.
Many (older?) people, would never get Uber to go to the airport, which is a very good profit opportunity.
So, I don't see Uber having a 100% monopoly in any future, as various people have various needs and opinions and it's not a race to the bottom on price in this segment.
They will both coexist, but for people taking the cab in the first place, $0.75 is not even on the list of thoughts in downtown Toronto. You get out of a Johny Cash event, $200 a person ticket, it's snowy, and you'll wait few minutes for uber when the Taxis are parked up front?
As you move outwards from the core, more people drive Uber, and one was even my ex coworker, so he told lots of stories.
So, to conclude, you can't assume race to the bottom on price alone. Or IPhones, rolexes, Alienware PCs, etc would have been long gone.