Uber isn't externalizing costs on society. Uber pays drivers more than they are worth, using venture capital. Drivers have an income they wouldn't otherwise have. Riders pay less than they otherwise would have.
The only ones who lose here are Taxi drivers who are being undercut. Taxi drivers don't represent "society", they represent the taxi lobby.
In the process replacing an industry that it may not able to sustain.
So what does a post Uber/post VC ad hoc transit market look like?
Once the VC dries up the market will start to show it's true colors and it may be that the model isn't sustainable, although I think it probably should be once rates rise.
The only ones who lose here are Taxi drivers who are being undercut. Taxi drivers don't represent "society", they represent the taxi lobby.