Eh.. just charge people more money to use Uber. Yeah they would lose a lot of regular riders but will those people really go back to using cabs? Uber could double their prices and I would still use them over taxis 9/10 times.
I'm not sure what the free market textbook says about this but as a consumer it's a huge win.
I came across it while talking with a bar fly at my neighborhood pub who owns and operates a freight brokerage, he's been getting sales calls from such companies and is about to make a switch to some platform that has fewer features than the one he uses now, but apparently has exactly the ones he needs (or as he put it "I can get by") and for cheaper.
The job was in SF but they operated all over the US.
My last experience consisted of a driver who seemed jacked on coke or speed or maybe just nuts driving very badly and then (as usual for cabs) pretending the card system didn't work to pressure me into going out of my way to get cash.
Prior to that there was a cab that smelled bad with a broken door that caused the door ajar indicator to beep for the entire trip. This driver also pretended the card system didn't work.
City is Los Angeles but I have had similarly bad experiences in SF and Dallas in recent years. In Dallas I had one whose driver smelled like sasquatch and was obviously taking me the long way. In SF my driver helpfully introduced me to QAnon.
I've had marginal Ubers and Lyfts but none have been as bad as the average licensed taxi.
They’d def lose riders. But not close to 50% of rides. Not even half that. For myself, I’d ride a bit less. Probably not do 1 in 4 rides I’d normally do. But when I need a ride back from the train station or I’m late to something and public transit will take too long. I’m not gonna take a cab. I’m going to still use them.
They could also both increase or add loyalty programs. Uber’s currently is pretty crappy as a casual rider. Im guessing doubling the loyalty program payouts wouldn’t cut into the 50% increase too much but could stop some of the ridership decrease bleeding.
And there's the rub. They're playing investor-bonfire chicken.
More strictly: it's prisoner's dilemma. Defection is the dominant strategy.
That said, it would be interesting to see what their respective price charts look like over time. A typical strategy for signalling not-technically-a-cartel price rises is to announce price raise well in advance. If the others don't match, you quietly drop it.
Same with hotels and airbnb