The issue of profitability again is orthogonal to drivers. How do you pay for vehicles and maintenance of your service is not profitable?
In any case, to answer your original question: Yes, I think halving the cost of taxis will make a significant difference to their viability in many use cases. I think costs may also fall further than that, as regulations have been limiting competition in taxi markets. (And just intuitively, one would expect that sharing a car should be cheaper than owning one.)
Moreover, I think taxi markets were stagnant for a long time, so the lack of such a service in the past doesn't necessarily mean it couldn't have been viable, and the new players may simply not have explored this kind of service yet.
>How do you pay for vehicles and maintenance of your service is not profitable?
The point is that without a driver, your ongoing costs (i.e. fuel and maintenance) are more proportional to usage. A driver sitting doing nothing is costing you money, but a car sitting doing nothing barely does.
Think it is too obvious to miss...
>The point is that without a driver, your ongoing costs (i.e. fuel and maintenance) are more proportional to usage.
isnt it the same with a driver too?
If you charge close to linear pricing over short distances, I think it could be very affordable.
And another advantage is that the service doesn't have to be immediately popular to be cost effective, since you don't need to pay drivers to sit around to provide availability.