There is evidence of this all over the press if you want to search for it. Take for instance The 'non-profit' "People's Uber" in China. They guaranteed wages for drivers and capped rates at auto rickshaw prices. This spring in Guangzhou I was taking 20 minute rides and paying around $1.50. It was ridiculous. While they were trying to maintain a foothold in Germany as more than a legal taxi hailing service (which is what they are now, competing with apps like mytaxi) they were limiting prices to legal Mitfahrgelegenheit (private ride share) prices. What was normally a 70€ cab ride between Düsseldorf and Köln cost 12€ (Less than taking the regional train for 1 person though the driver was paid much more of course. This went on for months.
I'm sure they are making money in markets where the existing taxi service was truly dreadful and where they don't have to compete on price and have been able to raise their rates to on par or higher than taxi rates, but they are definitely paying a price for expansion.
> they are definitely paying a price for expansion.
Of course, that's the whole reason to raise capital (so you can expand rapidly on a model which has attractive unit economics).
The point is that we don't have to speculate about what will happen once Uber raises prices. Just look at their mature markets, where pricing is on par with taxis, and you can see a profitable model.
I think that the profitability in mature markets has a lot to do with how sane existing taxi regulations are. Even with the subsidized prices in Berlin, taxis there are so plentiful and relatively affordable that aside from heavily subsidized rides Uber didn't have a huge edge over the taxi+mytaxi combo. It was never really faster to get a car via Uber than with MyTaxi, or more often than not, just walking to the street and waiting 1-2 minutes. They've never had close to the same participation from Taxi drivers as MyTaxi and others have had. Incidentally, most Berlin Taxis are independent and pay only a small fee to get licensed. They must carry commercial insurance, but almost no one thinks that is unreasonable.
It's ironic because if the cities where Uber is madly profitable actually responded to their criticisms and reformed their protectionist taxi regulations, Uber would lose much of their pricing edge to competition.
I'm sure they are making money in markets where the existing taxi service was truly dreadful and where they don't have to compete on price and have been able to raise their rates to on par or higher than taxi rates, but they are definitely paying a price for expansion.