Sounds like they need a loyalty program, so customers have an incentive not to simply take "Uber or Lyft, whichever isn't surging right now."
So: UberMiles -- earn and redeem miles when you take an Uber. And there can be Gold, Silver, and Platinum levels you earn for taking more Ubers -- at the higher levels, you could get complimentary space-available upgrades, special discounts, or insulation from surge pricing. And they could partner with a bank to market an UberMiles credit card (earn one mile for every dollar you spend), and with Hilton to offer Points&Miles™ to hotel guests. And the miles can expire if there's no account activity for 18 months. And people can rant and complain and swear they're going to take all their business to Lyft when Uber inevitably changes the miles redemption chart to become more profitable.
They only have their name brand, and Uber has to be aggressive because they're operating in a space with little barriers to entry. They cannot raise their prices - people do not depend on Uber and can switch at zero costs.
What worries me is that the online version will become the definitive version of the story. There is no way to know, without directly comparing against the print version, how the online version differs from the print version.
At least there is newsdiffs.org for tracking changes for the online version of the New York Times (and cnn.com, politico.com, washingtonpost.com, and bbc.co.uk).
The print version has the virtue of actually explaining a plausible mechanism by which they can become profitable. Building enough loyalty (or other form of competitive moat) to allow them to set a larger margin between customer price and driver pay, is a coherent strategy. The online version of the article, by contrast, just vaguely says that maybe if they grow they will (somehow) become profitable.
It's not paradoxical, there is no contradiction in it.
They really hope to capitalize on their first mover advantage and name recognition to be able to raise prices, lower compensation and still keep the customers and drivers.
They aren't profitable now. Clearly that's unsustainable. To become profitable they need more revenue than expense. There are not many ways that this can happen, and one given is that the fare charged must be higher than what the driver is paid for that trip.
Actually, I believe they are highly profitable in the more mature markets. Overall they're losing money, but that's because they are expanding at an incredibly rapid rate.
I guess a potential problem will be if the smaller markets they are expanding into now don't turn out to be as profitable as the early ones once they mature.
There is a line of thinking that says that profit is by definition fucking people over.
I am not telling you that you ought to agree with that line of thinking, but I think you should at least familiarise yourself with it instead of dismissing the idea as if it came from another planet.
> raise prices, lower compensation and still keep the customers and drivers.
that's what I mean by fucking people over but it's hopeful at best that people will remain loyal because there's zero cost of switching. As soon as Uber makes profit, others will jump right in with lower prices because there's no barrier to entry, no network effect. Your homies riding Uber? Oh okay, I guess I'm stuck with Uber since all my friends are on it (sarcasm). Unless they bribe city officials that it is illegal to operate as a Uber competitor in which case people would probably go even more apeshit.
But how do they establish near or total monopoly? By taking control of government in the way that previous taxi monopolies did. First you extract permission to do what you want (or the ability to survive doing what you want), then you eliminate permission / ability for competitors.
This is the path for anything to become an apex predator, right? Then apex predators inevitably lose their edge and they get destroyed by a Minnesotan dentist or invading hordes or, or, or.
So the link is apt because if one can intelligently design a new species, it has a better chance of changing the environment to its own ends than one of many of an existing species adapted to the status quo.
How can they be fucking people over if they aren't profitable? Don't you have to get laid to be fucking and make money to be profitable?
OHHH! Or is it that they are fucking people over, and getting fucked, but being profitable is like fucking AND creating progeny and so far Uber is infertile? Yeah, I guess that makes sense. They're fucking people over but no babies yet. It checks out.
So: UberMiles -- earn and redeem miles when you take an Uber. And there can be Gold, Silver, and Platinum levels you earn for taking more Ubers -- at the higher levels, you could get complimentary space-available upgrades, special discounts, or insulation from surge pricing. And they could partner with a bank to market an UberMiles credit card (earn one mile for every dollar you spend), and with Hilton to offer Points&Miles™ to hotel guests. And the miles can expire if there's no account activity for 18 months. And people can rant and complain and swear they're going to take all their business to Lyft when Uber inevitably changes the miles redemption chart to become more profitable.