Economies of scale kick in when you own the fleet. I'm also not sure about the statement "most of their drivers are making little more than the cost of operating their vehicle".

If owning the fleet was valuable, there's not much (probably just labor law and some issues with the mythos) stopping Uber et al from owning the vehicles the drivers drive.

I think self-driving is the cold fusion of the 21st century, but the reason unlicensed taxi companies are pursuing it is because if, by some miracle, it comes to fruition, it might make their business viable, but it would be hard to compete with an automaker running autonomous taxis when you have to buy your autonomous taxis from the automaker you're competing with. If they can build it on top of existing cars, it makes it more possible to compete; and if they end up with an enabling patent, it means they'll probably survive in some form.

Drivers have an acquisition cost in marketing too. And will quit eventually if they keep losing money.

Semantics. Cars don’t cost that much to operate. Uber doesn’t cost that much. The portion going to the human take home pay minus car value depreciation and other expenses is small, but a substantial chunk of it.

Cars cost a huge amount of money upfront and require a tremendous amount of maintenance to operate, and that's before we get into insurance and accidents.

Right now, all of these are fully on the drivers. This will turn around if Uber rolls self-driving cars worldwide.

Having looked into the finances of car share companies I can vouch that the fleet costs are just huge blots of red ink on their finances

Uber wouldn't work if they owned the fleet - it's a huge advantage to just be the app + ops + acquisition costs

Right, eventually the drivers will figure out that they are the losers in this scheme. People really don't understand just how much it costs to own a car, especially one you drive 30k miles a year.

Taxi cab companies are incredibly corrupt as they are run like your local cable TV service! With all the customer satisfaction and low prices and quality service that that entails! I believe that Lyft and Uber can easily beat the corruption of the taxi cab market and still provide rides at a good price and profitably.

Because this is untrue? Even the most pessimistic estimates have drivers making a substantial amount more than 0; the complaints are that they don't make enough to justify their hours of labor. Removing this labor cost would be non trivial, esp once the cost of a self-driving fleet stabilizes.