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Traditional public transport certainly could do that (and demand-response routes are a thing in rural places), but fixed-route consistent routes make more sense in urban areas from geometric considerations (and you know, not requiring a charged smart phone to get from point A to B).

Uber has a great potential to be used as public transport, with dynamic route pathing based on supply and demand

Yeah, Silicon Valley companies taking over our public transport infrastructure.

What could ever go wrong with that?

Uber is a disaster as public transit. It's functionally little different than just having everyone drive themselves. Not needing parking is a big benefit, but it's still a bad idea.

It is functionally very different because:

-You dont have to drive around and find a park (less congestion and real estate)

-You can pool your trip with another user (Uber Pool)