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.
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.