Tyler Cowen has an interesting argument for why Uber’s service may get worse in the long-run. Here is the gist of it:

The better Uber gets, the more people can do without cars and the more taxis will go out of business.  In contrast, we are currently living in a world where there is excess capacity of automobiles, especially for short-term rental.  The stocks of taxis, rental cars, and personal automobiles mostly have been determined by past considerations which did not take the existence of Uber into account.  Those stocks will decline over time as idle vehicles are used more efficiently.  There will be fewer circulating vehicles and perhaps the price of a short-term ride will be higher, once the excess capacity disappears.  Waiting time might be higher too.

The point, if I understand correctly, is we are now benefitting from a big surplus of cars right now that sit idle. In economic terms, this relies on the fixed cost of cars being an important component for drivers. I would argue this is not the case.

from Forbes – Tech http://ift.tt/1MoRDTq
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