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Industries like sugar and salt are commodity industries where prices are driven by costs. There are economies of scale that allow one player to dominate a market and prevent new entrants. Uber does not have this advantage since each market is effectively small and isolated (there are thousands of taxi markets in the USA alone) and most of the costs are unit costs, not fixed costs over which they can scale.

Any competitor with lower costs - say a business that used only one fuel-efficient car type that offered lower unit costs should be able to outcompete Uber. The contractor model where each contractor purchases and services the needed physical equipment (i.e. cars) is far from the most efficient way to run a capital intensive business.



That was pretty much what I was saying yes :).




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