We all know the consequences of these kinds of race to the bottom: the winner takes all and ends up controlling the market.

You left so much unsaid. When the race is won won’t the winner raise prices? If you were losing $20 per delivery then you will raise prices by $30 per delivery after you kill off the competition. Will enough customers be willing to pay the new higher price.

Deeper thinking, is the product actually worth the cost of production plus profit? Aren’t Uber and Lyft in the same position. They are operating at a loss so that they can take business away from existing old school taxi’s. When will they have killed off enough of the competition that they can raise prices to a profitable level. I can here the outrage now when the Uber users have to start paying the actual cost of the product plus profit, enough profit to make up for years of losses.

TEK