Should Ubers Threat Is Likely To Decimate The Tax Industry?

The article compares Ubers and taxis and concludes that Ubers’ threat is likely to decimate the taxi industry. One point the author argues is taxis are unable to compete with Ubers’ traction because the cost of taxis could be undercut by Ubers. In my opinion, the author has a wrong reasoning. For both Ubers and taxis to supply services, they are always willing to maximize profits in the market. So if we compare who is more likely to win in the market, the evaluation should be who can earn more profits rather than whose costs are lower. I believe Ubers could earn more profits and so can compete with taxis.
I have some assumptions on my reasoning. First, except for medallions, all operation costs are the same for both Ubers and taxis. In total they don’t vary with the volume of services,

Different items mix here. A medallion is considered as a legal license permitting someone to operate the taxi service and the number offered is regulated by the local authority. So there is a limited number of taxis supplying their services and medallion creates the restriction for new taxi drivers. Medallion’s price is perfectly responsive to the change in its quantity. If the authority’s regulation on the number of taxis is less severe, more entries will lead an instant decrease in medallion’s price. Also, when there exist substitutable choices for passengers, they will have less needs for taxis than before and so medallions are less valuable. This will also lead to a decrease in medallion’s price as well. Medallion cost is unavoidable and cannot be recovered. Although its amount may change in some circumstances, it doesn’t vary with the level of distance they run. Thus, when offering services for a certain level of distance, both Ubers and taxis have the same least