>Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond.

That's the theory at least. How much can Uber realistically raise their prices before people realize that yellow cabs or driving themselves is just too much cheaper to ignore. So they'll have to massively increase prices and subsequently kill off their own userbase. It's a lose lose and I don't think any of these companies expecting to pull this off will survive.

I have never once called an Uber because it was cheaper than alternatives. It's more convenient, reliable, and except for certain times transparent about pricing.

They can increase the prices significantly and I will continue to use them over cabs.

The real question is whether you will take an Uber for $25 instead of a Lyft for $20.

Those are all valid points, but from a business perspective the biggest problem for Uber is and always been that their product is fundamentally a commodity. Sure, economies of scale can help, but nothing they can do can change that underlying truth.

Sounds like a darn weak moat to build a 58b USD valuation on.

> Once you've smothered the competition in investor money, you're free to raise prices to profitability and beyond.

Of course, if a company started raising prices to profitability, perhaps it would be "worthwhile" for another group of investors to come along and start the whole cycle over again with a new - excessively funded - startup.

That's one reason. Another reason is that the market isn't profitable except through economies of scale. Until you've captured the market you'll burn cash on user growth.