Why is Uber cheaper than Taxi?
The Guru Take
Many factors. Primary reason? Uber sets it lower.
I could list many factors why one business charges less than another. Let's try it with Uber. One could argue they better business efficiency, where each driver waits less between each ride. Another may say they keep costs lower by the automation of dispatch. We can list a bunch.
However, most likely reason is that Uber is artificially setting the price lower than taxis, in order to increase user adoption and promote growth. Remember that Uber operates on a net loss, and they can continue to do so while leveraging investors' money. Hence, Uber does not have to set their price with the goal of turning a profit. At least not yet.
While taxi companies must make profits in order to continue operating, Uber does not. I personally cannot comment on why the prices are set to where they are (i.e. what Uber's reasoning is), but I can say that if they do not have to make a profit, they can be more aggresive on the pricing to take down an existing business like the taxis.