> That seems like a strange conclusion considering Uber doesn't even pay for the vehicles and fuel.

Well, they do, indirectly, in that that is part of the money the driver is paid. Yes, one way they've improved the numbers is squeezing their drivers more, but they can't do that forever. They're already encountering a lot of pushback.

I question the claim that Uber is serving a bunch of small markets that traditional livery services do not. Do you have an example?

Not OP, but I can say from personal observation/experience that while not 'small', Uber has increased taxi use in the general sense in Texas cities that are so car-centric and-or sprawl-like that traditional taxi services were never really popular (Houston, Austin, Dallas, etc) - having more drivers available in an ad-hoc manner has made the dispatch time much more reasonable (minutes vs a hit-or-miss scheduling ordeal of ~1h) and so using taxis (e.g. Uber) as a viable means of transportation, especially for things like social events, is much more common than it was before. I suspect the same is likely in similar places where 'everyone has a car' and the geography is very spread out.

That's the kind of place I live but there are multiple livery services operating here too.

For example, Boca Raton in Florida is a wealthy area that had no taxi service until Uber. You literally had to get a limousine to go somewhere. Now its simple and cheap to get an Uber.

When you say a "limousine" are you not just describing a livery service where you call a dispatcher and they send a car?

The point is that you can get a $5-10 Uber ride instead of before where you'd spend $100+ on a limousine ride that you need to arrange well ahead of time. It wasn't a realistic option before except for special occasions.

> the ability to scale into smaller markets that taxis normally couldn't service.

Go on.

Mountain towns in Colorado, for example. Uber and Lyft operate in the major mountain towns where there is no taxi service at all.

Simple economics argues you are wrong about the costs aspect of things here. Do you think drivers are simply doing public service? Perhaps they have special gas pumps that are 30% cheaper?