A recent social media post by user (((Matthew Lewis))) has reignited discussions surrounding Uber's long-term business model, particularly its reliance on venture capital (VC) funding and its subsequent impact on public transit and ride pricing. The tweet, dated August 11, 2025, asserts that venture capitalists subsidized Uber to capture transit market share, with an eventual aim to increase prices after disrupting traditional transportation.
"From 2010 to 2020 a bunch of us tried to point out that the venture capitalists subsidizing Uber at a massive loss were simply trying to capture transit ride share, and would eventually jack prices once they'd killed or maimed transit. Y'all shoulda listened," the tweet stated.
Uber, founded in 2009, attracted billions in venture capital, with major investors including Google Ventures, Fidelity Investments, and Sequoia Capital across numerous funding rounds. This substantial capital enabled aggressive expansion and a strategy of offering competitive pricing to gain market dominance, often operating at significant losses in its early years. The company's financial turnaround, with its first annual profit reported in 2023, has coincided with shifts in its pricing mechanisms.
Initially, Uber employed a penetration pricing strategy, offering lower fares than traditional taxis to attract a broad customer base. Over time, its pricing model evolved to incorporate dynamic or "surge" pricing, adjusting fares in real-time based on demand, driver availability, and traffic conditions. More recently, Uber introduced "upfront pricing" in 2022, providing riders with a fixed fare before the trip, a move that some analyses suggest has contributed to the company's profitability but has also drawn criticism regarding driver pay.
Studies and industry observations indicate a complex relationship between ride-sharing services and public transit. While some research suggests a marginal decrease in public transit ridership in areas with high ride-sharing penetration, other studies point to ride-sharing complementing transit, particularly for first-mile/last-mile solutions. However, the traditional taxi industry has undeniably faced significant disruption and competition from Uber and similar services.
Critics, like the author of the tweet, have long argued that the initial low prices were a strategic maneuver to eliminate competition, a practice sometimes referred to as predatory pricing. As Uber has matured and achieved profitability, the perception of increased fares compared to its early days has become a point of contention for many consumers and commentators. The ongoing debate highlights the long-term implications of venture-backed disruption in established industries.