Reinvesting for growth is a terrible euphemism for subsiding taxi fares.

When they flip the switch they become more expensive that a regular mini-cab. Customers will leave in droves, drivers will leave in droves. There s no loyalty to a middleman.

The QC alone makes Uber’s business model viable. Holding drivers accountable with ratings makes Uber worthwhile at a premium over regular cabs, and significantly expanded the market. The only real risk at that point would be Lyft, the company that started the price war in the first place.

Uber may or may not be subsidizing fares, but they’re also spending tons of money on engineering and product development, both on their existing product and in an attempt to develop self-driving cars. That’s growth.

Rating people is great but it is not a unique value proposition.

But when customers leave in droves, they can respond by reducing infrastructure and doing layoffs, and then they'll probably still be profitable.

With Uber, I think there is some degree of loyalty just because of the ubiquity and convenience. Plus, I imagine their prices will be more or less the same as a taxi since they don't have the expense of dealing with the regulatory overhead (since they just blatantly ignore the law instead)

> (since they just blatantly ignore the law instead)

This is not true for all markets in which Uber operates - in NYC for example, uber cars are all registered with the TLC.

Oddly enough, when I compare Uber to Lyft in the East Bay, 99% of the time Lyft is cheaper by at least $3. Even Uber Pool is usually the same or slightly more expensive than a dedicated Lyft.

I have no idea why (maybe less drivers?) but I already stopped using Uber because of that. If their prices when even higher then I'd simply never use them again instead of the occasional time that I do now.

In my experience Uber is cheaper than Lyft for any 5/10 minute ride within SF city borders.

This is at best deeply unproven. We don't have a good idea of how much their volume would be depressed if they raised prices.