I imagine the market will correct the situation. Either Uber will raise the rate for drivers, or drivers will go work somewhere else. If neither of those things happen, then we know that Uber picked the right rate.

One image above shows that the per-mile rate at Uber is similar to 1980’s taxi rates, implying 2016 taxi rates are much better. So why would you not go work in a regular taxi? Does Uber have some special logistical algorithm that enables drivers to clock up so many more billable miles that total earnings are more than a regular taxi?