Originally Posted by Klazu
I am not sure Uber will be a savior either. Take away the taxi monopoly, but give Uber a monopoly for ride sharing? Prices will very likely start going up as soon as they would have a dominant market position. What is more worrisome is that their monopoly could one day be global. That's a dangerous path as well.
If you look at the very long term (over the period of decades, even centuries), it's very very rare to see sustained monopolies that haven't been propped up or at least passively encouraged by government intervention in the market of some form.
In the complete absence of government regulation and anti-trust laws, monopolies aren't uncommon, but they come and go.
Generally there is first a period where consumers actually benefit from increased economies of scale, and lower prices than competitors. A great example is Amazon. They control a massive portion of online retail, and despite this, their prices are still better than almost anywhere else.
Then comes a period where the monopoly has matured to the point where competition has been all but eliminated. At this point, prices do rise, and consumers certainly get gouged, at least for a time.
This period doesn't last though. The more monopolies take advantage of their market power, the greater incentive there is for new companies to compete, and generally a technological breakthrough renders the monopoly obsolete.
Historically governments have likely created more monopolies than they have broken up. The taxi monopoly wouldn't exist without government introduced licenses and regulation. There are plenty of other examples as well. The government could certainly do more to encourage competition amongst firms.
I wouldn't be too worried about an Uber monopoly. Eventually some other technology will come around and replace it. Alternatively, improvements to public transit would make Uber less necessary.