There is a similar effect with tollways. People often have a choice between using the tollway (and paying the toll) or taking the public roads and sitting in traffic.<p>I don’t have the figures for the USA, but here in Australia the rate people empirically use to avoid tolls is $12 per hour (i.e. they will sit in traffic for an hour extra to save $12 in tolls). Assuming people apply the same thinking to ride sharing, then a cheaper competitor with worse coverage should be able to capture a reasonable share of the market.