Uber-predatorial

Based on what I've read, it appears that Uber books driver fees at a rate that would make the company profitable under its current pricing model. Knowing that the resulting fees would be unattractive to drivers, but needing to keep passenger prices low enough to beat out traditional taxis, Uber kicks back  a portion of its share of passenger fees back to drivers, resulting in an unprofitable fee split for the company.

By labeling something that looks like a driver kickback an incentive, Uber gets to book it as an M&S expense. Then Uber justifies the corporate losses resulting from the cummulative kickbacks/incentives/M&S expenses as the cost of growing their business, as opposed to what it really is, a predatory pricing model designed to drive their biggest competition—traditional taxi companies—out of business.

By reporting cummulative, pre-incentive fee splits as reported revenues, Uber creates the appearance of a realistic and sustainable (i.e., non-predatory) revenue, along with the potential for future profitability.

Thirty years ago, economists would have called Uber's revenue model and fee structure a form of predatory pricing, designed to gain market share and drive competitors out of business. Today, they just call it the "new economy".