[bayesianhorse]

Driving people from A to B individually would be a "perfect competition" kind of situation without regulation. Some of the motivation behind regulating this market was that some taxi drivers just started robbing their customers.

Now Uber is doing away with the regulation, and it's "perfect competition" again, the state of affairs when prices have to be so low that there is almost no profit for the suppliers. Uber will always make the most overall profit with their drivers just on the edge of survival.

Uber may actually set the fares just below the profitability point, because new drivers or those "driving for fun" actually put money on the table rather than being paid.