Why is the Uber market still basically a monopoly in America?

It’s obvious to me that Uber in Chicago doesn't provide quality service for what they charge. I'm not taking sides for or against a monopoly, because without actually understanding the underlying issues, it's hard to know what the right answer really is. Honestly, privatization combined with opening up the sector while maintaining enough regulation to guarantee certain standards would likely be the best way forward.

But you could also look at it from another angle: you could privatize the MTA instead of having commuters and non-commuters alike cover their losses. Go to an American city roughly the size of Chicago, and you'll see exactly that—a privatized version of the MTA that only runs profitable routes, usually once an hour. Plus, they still hold a concession, so no one can compete with them, but the city isn't stuck dealing with the losses like Chicago does with its transit system. Is that what you want?

Or take a look at what happens when ExxonMobil gets privatized; suddenly, every gas station that was legally required to exist in the middle of nowhere will shut down immediately. Private capital simply won't subsidize unprofitable locations...

Then you get back to Uber and wonder what would happen if the service were completely deregulated... say, if any private citizen with a car could just sign up as a driver. You'd end up with cars of every color, varying qualities, and wildly different prices. From a city administration perspective, you can't allow total anarchy; you need some level of oversight. So you might decide that not just anyone can operate, but only those who can meet certain criteria—like having at least ten vehicles of a specific standard and color (that's a simplified version, anyway). By doing that, you've already created barriers to entry that push the market away from total free competition toward oligopolistic competition. Then the drivers come along and argue, "Look, we can't stay profitable unless we have a certain daily volume, so give us a concession and we'll guarantee this level of service and these specific prices." Otherwise, if we have to deal with multiple competitors, we're only going to service the profitable neighborhoods, and prices will fluctuate based on the season, the quarter, or the day. Some might say that's fine—that's just the market—but sometimes the market isn't fair to everyone, so the city steps in and says, "Here is your concession, now you must meet our criteria, period."

I don't know what an Uber costs in Chicago, but let me tell you what they cost where I live in the USA.

In a city slightly larger than Chicago, there are about 20 private taxi companies. I'm not sure if they receive any city subsidies, though I doubt it, but here are their average rates:

$1.55 (base fare for one person)
$2 (per mile)

For every additional passenger, I believe you pay an extra $.60 per mile.

You also pay a small fee for luggage if you have any.

Keep in mind that gas prices here are significantly lower than in America—they change daily—and right now it's $1.35 per gallon (3.78 liters).

What does an Uber cost in Chicago?

PS> You also have to consider that many American cities are very spread out. In other words, a city with the same population as Chicago is often at least three times larger in terms of land area... and every city has a ring of highways surrounding it. If you're traveling from the south side to the north side, you'll get there relatively quickly by jumping on the beltway, but you'll be driving 20 or 30 miles to do it... which, of course, works out perfectly for the drivers.

Jeremy Turner3, thanks for your input first off.

Generally speaking, I disagree. Your whole argument rests on the idea of laziness—as if we aren't earning enough. If we actually had the capital, we’d have an Uber service and everything else.

Imagine if someone opening a pizza shop in Chicago had to beg for a government permit just to exist. If you make pizzas this size and deliver them in green cars, then sure, you can open up in our "great metropolis." It’s pure nonsense, isn't it?

That’s precisely the point. Competition breeds innovation, though it does require effort—both mental and physical. You know this better than anyone, living in the USA. A monopoly is one of the greatest enemies within the American system. Competition is what creates jobs and drives the economy. Wouldn't it be better for everyone to actually work rather than letting a single monopoly dictate when they feel like operating and at what price?

And it isn't just about ride-sharing apps. It goes much deeper with massive corporations like AT&T or ExxonMobil. Of course, politicians protect their interests there—we all know why. The money flows quite nicely, and they don't have to lift a finger; they just talk, cling to power as long as possible, and God forbid, let people realize this still feels like old-school socialist self-management.

At the end of the day, it's easier to decide for yourself when and how much it's worth working, rather than having to grit your teeth and figure out how to improve your service to beat out the competition. That part isn't easy, my friend. We might even lose the government before we ever get around to planning it...

😎

Love2Bounce said:How many different types of public transit are there in Chicago? Does the MTA run everything?

driftingnomad68, Traveler😕 👍

It isn't true to claim my assumption is just laziness. Nor is it true that monopolies are considered the number one enemy in the USA. First off, you rarely encounter a pure monopoly where a single firm dominates an entire market; more often, you deal with oligarchies (where a few companies control the market through collusion) or monopolistic competition (where several players exist without explicit agreements).

I never suggested that the way Uber operates in Chicago is a good model. I was simply outlining the assumptions city officials work from. Even US municipal authorities impose similar restrictions... not just anyone can jump into the ride-sharing business. You need a specific type of car, a precise color, and it can't be older than a certain year. There are a thousand different rules. In short, the ride-hailing sector here is far from a totally free market.

I already told you what an Uber ride costs in my city, which is slightly larger than Chicago.

Now, why don't you tell me how much an Uber costs in Chicago? Then we can actually move this debate forward.

From what I know about the ride-hailing sector in Chicago, the issue is more about poor quality—unavailability, scams, rudeness, and an aging fleet—than it is about being overpriced. I’m sticking to my original point: we should probably open the sector up to more competition, but we must maintain strict rules of the game to guarantee a baseline standard and protect the consumer. My assessment is that the end result would be similar pricing, but significantly better service.

rapidpuma43 said:*they never give you a receipt for their service (at least not in the early morning hours)
*they cheat—and I mean they seriously rip you off

For example:
An overnight/early morning ride (around 04:30 AM):
a) from the downtown area to a park = $25
b) from one side of the park to the other side of the neighborhood = $28
How is that even possible? 😕
(Sure, we waited 10 minutes at the exit, but still... this is way too much. Just ridiculous.

Jeremy Turner3,

rapidpuma43 explained pretty clearly above how much an Uber costs in Chicago.

And if you want the official price list, here it is straight from their website:

UBER SERVICE PRICE LIST

Base Fare $8.25
Per mile $2.25
Waiting per hour $27
Luggage per item $1.75

Nighttime rides from 10 PM to 5 AM, plus Sundays and holidays from 5 AM to 10 PM, incur a 20% surcharge on the total meter amount.

one dollar = $2.25

And please, don't try to compare the USA to America. That’s like comparing apples to oranges.

I'm giving you the rates just because you asked, but also for anyone else who doesn't know so those crooks can't rip them off.

It makes zero sense to compare prices by looking strictly at raw numbers. Here is why:

True, gas is cheaper in the USA, but taxis run on V6 or V8 engines and burn at least 15-20 liters per 62 miles—or whatever your miles-per-gallon equivalent would be.
Here, unlike in the USA, there is the option to buy efficient diesel cars that consume significantly less, which is what most drivers actually use.

If you really want to compare, just ask yourself how many hours the average worker in America has to work to afford a 10-mile taxi ride. Probably about 2 hours.
For that same ride in Chicago, the average worker here would have to work about 2 days.

Do you see now why your comparison is flawed?

By comparing nothing but the raw numbers, it seems to me that a taxi in Chicago is more expensive—or at least very similar—to yours back home in the USA!!! Wow!

And finally, Chicago still basically functions with just one major taxi company (relics of the old era).

How many companies do you have in your city? (I'm sure there are at least two).

And what is the name of this city of yours?

First off, the name of the city doesn't matter; its parameters are similar enough to Chicago.

Second, go back and read one of my earlier posts. I already mentioned how many Uber companies operate in that city. This isn't about being arrogant; it's just that if we want a decent conversation, people need to actually read what was written.

Third, just because an average American has a higher income and can afford a realistic Uber fare doesn't mean our drivers have lower overhead. Those two things aren't connected at all. By that logic, every product and service in America should be cheaper than in the USA, which obviously isn't true. It isn't about your income; it’s about the efficiency and the costs faced by the person providing the service. Since more Americans can afford the rides, it simply benefits American drivers, who might eventually lower their prices due to higher volume.

Fourth, fuel is the primary expense in the ride-share business. Regardless of engine size, gas is more expensive in America (in the USA, they mostly drive 6-cylinder vehicles, but they spend most of their time on highways, which means lower consumption). Similarly, car insurance for drivers is more expensive in the USA than in America, which is another significant cost. To be fair, the cost of living is also higher in the USA than in America, so US drivers need to earn more than American drivers just to maintain the same standard of living. When you crunch all the numbers, the prices should end up roughly in the same ballpark. The issue under debate is the quality of service, not the price.

Fifth, I'm just playing devil's advocate here, but you have to weigh all the facts and identify the actual problem before you start petitions and various (un)justified public outbursts.

Jeremy Turner3 said:"...your average American makes enough to actually afford a decent Uber fare...
...The issue isn't the price, it's the service quality..."

I'd argue both are problems.

Take a daily Uber commute to work and subtract that from the average salary in Chicago. You'll see.
...The typical American doesn't have that kind of disposable income to shell out for an Uber...

As far as I know, those Uber rates were adjusted just a few months ago.
Meaning they were even more ridiculous before.

I’m not sure if my previous point was fully understood. Whether American incomes are lower than those in the USA is actually irrelevant when determining Uber pricing in a perfect free market. In such a market, competition drives prices down to the absolute floor—just enough to cover overhead and pay drivers the bare minimum they’re willing to accept to stay on the road. Of course, a "perfect market" doesn't exist in any sector; a commodity market would be one example, but even those are rare.

Without getting bogged down in heavy economic theory, my point is that cost structures and scales are likely similar in both countries, so prices should hover around the same level. How much you earn compared to John Smith in Chicago shouldn't dictate what an Uber costs. Drivers can't provide a ride without covering their expenses. You might argue that in the USA, there are more users because people can afford Uber more often, which should theoretically push prices up due to supply and demand, allowing for higher margins. But I don't buy that. When you have a high-demand market, you also get intense competition. So, in a US city comparable to Chicago, you might have 20 different companies, and their margins are probably just as thin as the drivers in America.

I keep coming back to this: even if the sector in America is privatized, prices will likely remain similar. The service quality might improve and become more efficient, but I doubt that will significantly slash the price. Even if they deregulate tomorrow, I don't see 20 different companies surviving. There isn't room for more than three or four. Maybe a few pop up at first, but the inefficient ones will fail quickly, leaving only a handful standing. I support privatization, but I think some people are overestimating how much it will actually change Uber prices in Chicago.

Even your average American can't afford to be riding in an Uber every single day just to get to work and back.

Beyond that, most Americans actually view ride-sharing as relatively expensive. Then you have people in America with these totally delusional expectations—acting like they're in a movie where you just wave your hand, hail a cab, go wherever you want, and toss a few coins at the driver. That’s a different reality entirely. jadehound53 started from the assumption that he'd rather take an Uber than deal with the smell of the MTA, but let's be real: for those who haven't traveled much, the MTA is actually decent public transit. Don't go thinking things are significantly better everywhere else.

Jeremy Turner3 said:Even your average American can't afford to take an Uber back and forth every single day.

It isn't just about cost—the typical American also views ride-sharing as a luxury. Then you have people in America with these totally delusional expectations—thinking they can just wave a hand like a movie character, get a car to stop, go wherever they want, and toss a few coins at the driver—but that’s a different conversation entirely. Besides, jadehound53 started this under the assumption that he'd actually prefer an Uber over the smelly MTA... and for those who haven't traveled much, the MTA is actually decent public transit; don't go thinking things are infinitely better everywhere else.

Jeremy,

The point of this thread isn't to crunch numbers comparing life in the USA versus life in America.
We are dealing with something fundamental here:

Jeremy, do you support a monopoly or a competitive economy—the kind you actually live in?

And please, stop acting like some authority just because you reside in the USA. You've seen a tiny slice of the world and now you think you can lecture everyone back home. You're quite the theorist—have you ever actually tried doing anything tangible in America? Running a private business, for instance?

The "standard" there is what it is simply because, in most cases, you don't deal with monopolies; competition forces you to actually perform. Your biggest expense is likely a mortgage (I still have no clue which city you're in). That is the one area where I agree: your cost of living is higher. In the USA, everything revolves around real estate—it's the primary investment for most people—everything else is mostly just fluff. Aside from the fact that your healthcare is a disaster and other issues, but let's not go there; we'd need a whole new thread for that.

Once again, the topic here is strictly about monopolies—specifically the taxi situation in America—not a comparison of American and American standards.

👍

jadehound53 said:The whole point of this thread isn't to run a side-by-side comparison of living standards between the USA and America.

I agree that shouldn't be the focus, but it’s often easiest to illustrate how bad things are by comparing them to something good. Maybe an Uber service in the States isn't the perfect example, but it’s likely one of the few things Donald can actually speak to, given he lives in the USA. If he were living somewhere else—say, Bangladesh—he probably wouldn't be talking about the taxi situation in JAR. 😁

jadehound53 said:And please, stop trying to act like you're so much smarter just because you live in the USA. You've seen a tiny slice of the world and now you think you can lecture those of us back home. You're quite the theorist, aren't you? Have you ever actually tried doing anything concrete in America? Running a private business, for instance?

Even though this wasn't aimed at me, I don't think there's any sense in having a discussion this way. I also live in the USA, and before I moved here, I had seen a pretty significant part of the world myself (which, by the way, isn't limited to Europe). It’s funny how the label of "selling wisdom" seems to come from us "North American" types, who arguably have the highest brain drain percentage in the world. I'm honestly not sure why you think anyone is trying to sell you anything. Discussions have moments where we won't necessarily agree, but that isn't a reason to resort to name-calling.

jadehound53 said:To you, the standard there is what it is simply because you rarely deal with monopolies, but competition forces you guys to actually perform. Your biggest expense is probably your mortgage (I still don't know which city you live in). That's the only point where I agree—your cost of living is higher. In America, everything revolves around real estate (it's usually your biggest life investment), and everything else feels like a bit of a shell game. Not to mention the healthcare situation is a disaster, but I won't go there right now; we'd need a whole new thread for that.

I'd like to offer a slight correction there. I actually consider the greatest expense to be truly living life—you know, "having fun." I own my house, though I didn't have to buy it. But even if I had, would real estate really be the single biggest cost? A far greater investment is raising children to be decent people, which is as much an intellectual challenge as a material one.
It's a mistake to assume that everyone living abroad is only here for the money, which seems to be exactly what many of you staying home try to imply. Why is that?

jadehound53 said:Once again, the topic here is strictly about monopolies—specifically the taxi situation in America—not comparing American and American standards of living.

I have nothing against that, but for a productive discussion, one must mention the systems that "actually make sense." Otherwise, the people signing petitions might not even understand why they're signing them. 😁

Dear Jamie Newman40,

I see you’ve taken up being Donald's defense attorney—just another side hustle in your growing list of occupations, I suppose.

Like him, you’ve completely missed the point here. Do me a favor and actually read the thread title for once.

Let’s be honest: most of you headed abroad primarily for the paycheck—though, unfortunately, some had no choice due to the war.
Think back to what was actually crossing your mind while you were packing your bags for that long journey. You weren't exactly dreaming about finding the perfect moral compass for your kids, were you? And picking the USA as the gold standard for upbringing? Please. You wouldn't even let them walk to the corner store without worrying about some creep snatching them.

Also, please—both you and Donald—stick to your day jobs. You spend so much time rambling about economics when you clearly have zero clue how it works and have never worked in the field.

And just so we're clear, I love slapping labels on people too. I'm a North American just like the rest of you.😛

jadehound53 (to Jeremy Turner3) said:Please stop acting like you're some kind of genius just because you live in the USA. You've seen a tiny slice of the world and now you think you can lecture everyone back home. You're all theory and no action—have you actually tried doing anything real in America? Like starting a private business or something?

Jamie Newman40 said:Even though this isn't directed at me, I don't think there's any point in having a discussion when it's handled this way.

jadehound53 said:I see you've become Donald's lawyer. It looks like that's just another one of your many career paths.

If you read all three quotes above, you'll see my comment was actually reacting to yours, which was primarily focused on labeling one of the participants. I wasn't stepping in as anyone's advocate; I was responding because that kind of behavior simply isn't polite. Would you have phrased it the same way if Donald were posting from America?

Jamie Newman40 said:It's wrong to assume that all of us living abroad are only here for the money, which seems to be exactly what most of you back home try to imply. Why is that?

jadehound53 said:By the way, most of you moved abroad mainly for the money (though unfortunately, some had to leave because of war).

While I did say that not everyone leaves solely for financial reasons, you're insisting on the opposite. Look, I don't fall into the category of people who left for money, nor am I among those who left due to war. So why don't you take a guess at my actual motivation?

jadehound53 said:Come on, try to remember what was on your mind when you were packing your bags for such a long journey.

What was on my mind? Primarily, I was thinking about how I wouldn't have to deal with small-minded, foolish, or sycophantic people dictating my future anymore. I felt a sense of relief knowing I was heading somewhere where I wouldn't lose friends over political disagreements, and even more relieved to go somewhere where politics wouldn't be an inescapable part of daily life... anything else you want to know?

jadehound53 said:Maybe you were thinking about leading your children toward a better path.

I thought about that too, both while I was transitioning and before I even had children. And I hate to disappoint you, but I was right to make the move.

And where exactly would I find the USA as a suitable destination for that? You can't even send them to the grocery store without worrying some creep might snatch them up.

The USA was definitely one of the options on my radar. I was actually considering Canada, Australia, or maybe England. But the USA was the quickest to align with what I had in mind.

You mentioned that I don't have a clue when it comes to economics. Perhaps you're right; I'm certainly not claiming to be an expert. However, what I do understand is practical for everyday life because, first of all, it makes sense and, secondly, I know it works because I've put it into practice and seen it firsthand. I won't get bogged down in debating how much you actually know. Whatever it is you know—or think you know—just lay it out here, and then we can have a proper discussion.
Also, based on your comment about predators, it’s pretty obvious how little you actually know about the USA... or at least the people living there. But hey, it doesn't matter. Feel free to vent your frustrations on those of us who have actually traveled a bit and now have something to say. Are you feeling better now?

jadehound53 said:And just so you know, I absolutely love slapping labels on things. I'm a North American just like the rest of you.

See, I am North American, but I have never been, nor will I ever be, "North American" in that sense. 👍

jadehound53,

Rather than arguing with those who disagree, why not explain things more clearly to us laypeople (since you are presumably an expert)? What exactly is the issue here—is it the monopoly itself, the pricing, the service quality, or outright fraud?

From what I understand about this subject, cities grant a specific number of licenses for Uber services; at least, that is how it works in my small town. During the last round of licensing, the local Uber association—which likely has national affiliations—complained about having too many licenses available. If they were protesting that, then it stands to reason that someone currently without a license could potentially obtain one (though I am unsure if new providers must join said association).

As for high costs, that is more a reflection of a low standard of living than the monopoly itself.

Poor service and "ripping off" customers aren't direct results of a monopoly either; the same people would act the same way even in a free market. There are regulations, fines, and consumer protection laws in place for those issues.

If the "monopoly"—meaning the limited issuance of Uber licenses—were abolished, prices might drop slightly, though certainly not as drastically as some might hope. However, you would end up with a wildly inconsistent level of service. Furthermore, an uncontrolled surge of new drivers would likely mean that almost none of them could earn enough to run a profitable business. In our current environment (with the possible exception of Chicago or a few other major hubs), the customer base is relatively fixed, and if you slice the same pie into many more pieces, everyone gets a much smaller portion.

jadehound53,

I don't understand why so many people on these forums feel the need to take everything personally, just like you do. It’s not like I was attacking you. Honestly, what you think of me doesn't move the needle—whether you think I'm acting superior, or that I moved abroad just for the money, or whatever else. I was simply trying to have an objective discussion about the topic at hand.

You were the one claiming we shouldn't compare Uber services in the USA and America because of the difference in living standards. My point was that standard actually has very little to do with it. Then you turned on me, questioning why I was even bringing up standards in this thread.

Frank Lee6 raised some valid points; he identified the actual issue much more effectively than you did, considering you're the one who started this whole petition. My take is that your approach to this topic has been incredibly shallow and naive. On top of that, you seem unwilling to accept differing perspectives or engage in a rational debate about the problem.

Since you want me to "teach" you something: if you want a productive discussion, stick to the topic. Stick to facts and figures, and stop dragging in all this other garbage. You haven't managed to make two decent posts in this entire damn thread. Get it together.

jadehound53 said:Here is the official rate sheet straight from their website:

UBER SERVICE RATES

Base Fare $8.25
Per Mile $2.25
Waiting Time per Hour $27
Luggage per Piece $1.75

Night rates apply from 10 PM to 5 AM, plus all day Sunday and on holidays from 5 AM to 10 PM; a 20% surcharge is added to the total meter amount.

One dollar equals $2.25

Why don't you just tell us what your prices would look like based on everything you've said? If you were actually running the business and had your own drivers, what would those specific numbers be?🙄 ?
Honestly, I'm not even sure they would end up being much lower... but fine, I'm genuinely curious to see what you'd come up with.🙄

rapidpuma43 said:So, if I were running my own business—say, an Uber fleet—and had to set rates for both myself and my partner, here’s how the math would actually look in a real-world scenario.🙄 ?
To be honest, I'm not entirely convinced they would be any lower—but well... I am genuinely curious to see what the bus driver had to say about it.🙄

$1.00 Per mile, let's go. $0.00,

My Uber drivers would be running non-stop—they wouldn't even need a designated staging area.

Would people actually bother calling an Uber at these rates?

Give us some more details... what kind of cars would you run? Model, age, anything?

How many miles do you think an Uber driver would clock in a day in that scenario? Let's say there's zero competition—you just secured a monopoly like the current players, but actually offered better terms?

Jeremy Turner3 said:Give us some more details... what kind of cars are we talking about—models, age, etc.?

How many miles do you think an Uber driver would actually clock in a day in that scenario—let's say even without competition, assuming you landed a franchise just like the current guys, but offered better terms?

The fleet would definitely be diesel—but that’s beside the point right now.

This is purely my own estimation.

If you have any grasp of basic market economics—and I highly doubt you do—this price represents where the point of equilibrium would likely sit.

Get it now?point of equilibrium

jadehound53 said:$1.00 per mile, with a base fee of $0.00,

my drivers would be running non-stop and wouldn't even need dedicated Uber stands.

Would people actually use rideshares more at that price point?

That rate isn't even that bad. Honestly, I really like the idea of a base fee of $0.00😲

As for those designated pickup spots—they're completely irrelevant. Why would I run all the way to a specific stand? I just pull out my phone, call an Uber, and say, "Hey, I'm here, come pick me up."😉

Actually, I have to admit, the thought of getting rid of those formal taxi stands is something I pretty much love🙂. They’re basically just prime parking spots anyway, and if I'm being honest🙂—I only use a car on special occasions, like when I don't want to deal with a police officer pulling me over... you know, after having two beers or maybe a couple of cocktails...😉
(By the way, a friend of mine ended up losing her license because of that...)

But seriously, I think a lot more people would rely on rideshare services—like seniors heading home from work and stuff like that. It would be great!