The network effect was just explained above. The more drivers on the system, the shorter the ETAs. The shorter the ETAs, the more riders want to use that system. The more riders on the system, the less downtime between each ride for drivers. New entrants have to subsidize the market (pay drivers more than they make and give riders steep discounts) in an attempt to catch up.<p>Recent reports about Lyft burning hundreds of millions of dollars in a relatively short amount of time, without gaining much market share most places, shows just how high of barrier there is. Hailo pulled out of all of North America this year for similar reasons. It&#x27;s just really expensive to try to subsidize your way to competing with the network effect.