Imagine I gave you a personal chauffeur for each car that you own (lets just say in this hypothetical you have 2 cars in your household, so you now have 2 chauffeurs). Each of these chauffeurs are on-call 24/7, take up zero room in your car, never need to take bathroom breaks, and you never have to pay them.
Its probably not going to take long before you start saying to yourself: “Well, i have TWO of these guys, and each of them are just sitting around 21 hours a day doing absolutely nothing at predictable times (parked at home, parked at work, parked at the grocery store), waiting for me or my family to need them. How about I tell one of them to go find a job working for Uber when I’m not using it? Sure, it’s a bunch more wear and tear on my car, and I’d have to pay $20/day to get it cleaned, but it’s 21 hours a day in free labor! Even at minimum wage, that’s like $1300/week! In fact, I’d like to have bothof them getting jobs at Uber, but I don’t want to risk them both being across town when I need a ride now, so I’ll keep one dedicated for me, for now.”
Now picture all the cars parked in your neighborhood (in garages and on the street). Picture all the cars parked at the grocery store, and at the parking lot where you work, also sitting around unused for 21 hours a day. Imagine each one of them has also been granted it’s own personal chauffeur. All those owners have also done the math, and realized that they’re missing out on 21 hours of free Uber money a day, so they all make the same decision as you and keep half of their cars personally dedicated to themselves, and half to Uber.
Now your entire town has an absolutely enormous influx of Uber rides available. Fully half the cars in every single parking lot, and in every single household garage are just sitting around waiting for someone to hail a ride. How many seconds do you think it would take you to get an Uber in these conditions, maybe 10 or less?
So now you’ve realized that with a 10 second Uber wait time anywhere you are, there’s no point retaining your other chauffeur. You have that one get a job at Uber too, this time for 24 hours a day (another $1500/week!). You don’t even have it park at home anymore, what’s the point? You convert your garage to a home theater.
All your neighbors now do the same. With so much supply of free labor, and so little demand, Uber ride prices plummet, and settle on barely more than the upkeep/gas on the car. With so many cars still sitting around doing nothing but wait for rides, and the huge profit incentive gone, nobody is making money in Uber anymore other than large companies that can afford to make razor-thin profit margins. But Uber prices are still ridiculously cheap, so everyone still uses it, and people just make the rational choice to start dumping their cars one by one, until supply and demand re stabilize.
With no purpose, more than 75% of the car population eventually disappears. Home garages sit empty, parking lots are barren. Sure, people still have personal cars, but it’s no longer cost-effective or more convenient to do so. Uber is still dirt cheap, and wait times are negligible.