[dagw]

Uber, at least in the past, has been offering subsidies to its driver in many markets to grow its market share, Basically making up the difference between what customers are willing to pay and what drivers are willing to work for. The driver may very well be earning $25 for that $20 ride with Uber making up the difference.

[oceanofsolaris]

So in the longer run, either the drivers will have to work for less than they are willing to or the customers have to pay more than they are willing to. Or Uber has to keep paying the tab.

[dagw]

I imagine the plan is that once Uber has become ingrained enough in peoples lives that they have hard time imagining life without it, they can start slowly turning up the price without losing too many customers.