Long distance is harder. It'd work for popular commuter patterns, but you'd want a more structured service for that.
For a general near-real-time hailing system, limiting it to a smaller area means that even if your best match would add a relatively high distance penalty (say 50%), in absolute terms that's still tolerable (a few extra minutes). So that increases the probability of finding a match right now where the economics work out.
For a general near-real-time hailing system, limiting it to a smaller area means that even if your best match would add a relatively high distance penalty (say 50%), in absolute terms that's still tolerable (a few extra minutes). So that increases the probability of finding a match right now where the economics work out.