Wow, $36 for 3.45 km? I assume that's Australia, right? so that's roughly 2.1 miles for $33 USD.
That ride would be $9.00 (US) in San Francisco. [0]
Perhaps Uber is, like Apple, quite simply providing a higher class of service and getting compensated proportionally for it. Maybe they won't ever eliminate traditional taxis b/c not enough people can afford a 266% markup.
The ride took 18 minutes, and most of the money is for time. Say a car would take that route at an average of 10 miles an hour + stoppage time. It seems a conservative estimate. Then the cost of the ride would be $0.559 + $3.5 + 6 $0.55 = $11.75.
Even so, had he got an UberX it would have cost him $12.40, or $11.50, so it's really quite comparable.
I spent $15 last week going from Union Square SF to the Caltrain station (accidentally picked Uber Black not UberX) - about a mile. It's really quite a lot nicer than a taxi. So it's really quite close, dollar for dollar
But here's the thing - SF taxis have (presumably because of past abuses) very rigidly pegged milage to total cost in order to properly compensate drivers. The problem is that this works terribly for further distances. So SFO to Palo Alto will set you back at an absolute minimum about $100, but Millbrae (2 miles fewer) to Palo Alto cost me $30 on UberX. Where I live in the UK, I'll spend £20 ($45) on travelling 6 miles after a night out (no traffic) - because the taxis go off meter outside the city limits. Travelling 3 miles to catch a bus to London in a minicab, prebooked costs £8.
Taxis also charge for time if they're idling in traffic; maybe the traffic was hellish? I'm from the next major city in Aus (which also has overpriced taxis) and I was suprised at the cost of that taxi ride.
That ride would be $9.00 (US) in San Francisco. [0]
Perhaps Uber is, like Apple, quite simply providing a higher class of service and getting compensated proportionally for it. Maybe they won't ever eliminate traditional taxis b/c not enough people can afford a 266% markup.
[0]http://yellowcabsf.com/service/cab-fares/