The even bigger question is what their margins will look like if they're forced to reclassify all or most of their contract workers as employees. Both DoorDash[1] and Instacart[2] are facing class action lawsuits over this.
Uber makes a nice profit in mature markets, but that does not mean their current margins are sustainable. Its hard to imagine a future where they don't pay drivers more.
As a few HN folks have observed recently, that turns Uber from a wage-heavy (but always on the lookout for corners to cut) business to a capital-heavy one. That wouldn't be a impossible transition, but it would be a transition.
In fact, its the perfect transition from startup to mature company with a substantial moat. With a proven business model then can raise $Bs in non-dilutive debt-capital to finance vehicle purchases.
And in the long run... I know there's this meme here that 100% autonomous vehicles are just around the corner. But (regrettably), I'm more inclined to side with the arguments that it's many decades away. [1]
Evil... And I'm almost certain it's what they'll do. Owner pays for purchase, upkeep, parking, and insurance, covering all the capital outlay, depreciation, and risk, while Uber skims off the profit. It's sort of "insurance in reverse."
They prefer to open an office and hire support staff within each location they operate. In some markets (LA, SF) the revenue from rides quickly outpaces the cost of supporting those offices, in others (Spokane, Halifax) it remains to be seen.
The only thing of significant value that they give away is $20 credits to new riders and some new driver bonuses.
The number of full-fare (no subsidy to either rider or driver) Uber trips surely absorbs these incentives, leaving a positive gross margin. (There's also a miniscule computing, bandwidth, and payment processing cost to a marginal ride, marginal being defined as the nominal X+1th ride after all the costs for X rides are already paid for.)
Perhaps absolute certainty is a slight overstatement, but here's one where I'd bet eating my hat on it. I edited to insert an "almost".
Here in China Uber has various subsidy programmes for drivers and customers. These eat into margins and make them negative for some (but probably not all) trips.
Example: a few weeks ago, I paid ~3USD for a 13km ride that took 90 minutes (due to Beijing traffic). The driver was definitely paid more than that for the ride.
[1] http://www.latimes.com/business/technology/la-fi-tn-grubhub-...
[2] http://www.xconomy.com/san-francisco/2015/08/06/instacart-ex...