Uber is not (only) competing with taxis and car services. They are competing with vehicle ownership.
This single assumption dramatically affects the size of market Uber is serving.
If you drive 7,000 miles a year (so, about 5,000 miles less than average), that's $9,450 dollars per year.
The TCO of a Honda Civic, assuming 15,000 miles a year (more than twice what we're assuming for the Lyft rider!) is on average a couple thousand dollars less per year [2].
Rideshare is not a reasonable substitute for car ownership for anyone who is cost-conscious, and it will never be until and unless autonomous vehicles exist.
[1] https://www.lyft.com/help?article=1263247 [2] http://www.edmunds.com/honda/civic/2014/tco.html?style=20049...
And there are some pretty hard lower bounds on this. Drivers gotta eat, man. At $1.36 per mile, if you get 20 paid miles per hour (which I don't think anyone genuinely does on a regular basis), that's $26.72 per hour -- gross. Take away 20% for Lyft, driver's making $21.38 an hour. Take away $2 for gas for those 20 miles, it's $19.38. Another $1 for maintenance costs, and you've got a real income, pre-tax, of about $36k for a year of full-time work. There may be some room for downward pressure on that price, but there isn't a lot.
(In actual fact, I assume that average per-mile prices for Lyft rides are much higher than $1.36, due to prime time tips and wait time).