how does one build loyalty by fucking people over?
They aren't profitable now. Clearly that's unsustainable. To become profitable they need more revenue than expense. There are not many ways that this can happen, and one given is that the fare charged must be higher than what the driver is paid for that trip.
I guess a potential problem will be if the smaller markets they are expanding into now don't turn out to be as profitable as the early ones once they mature.
There is a line of thinking that says that profit is by definition fucking people over.
I am not telling you that you ought to agree with that line of thinking, but I think you should at least familiarise yourself with it instead of dismissing the idea as if it came from another planet.
How likely is this to engender feelings of brand loyalty in you.
No one will notice.
The few who do will be "spineless socialists."
that's what I mean by fucking people over but it's hopeful at best that people will remain loyal because there's zero cost of switching. As soon as Uber makes profit, others will jump right in with lower prices because there's no barrier to entry, no network effect. Your homies riding Uber? Oh okay, I guess I'm stuck with Uber since all my friends are on it (sarcasm). Unless they bribe city officials that it is illegal to operate as a Uber competitor in which case people would probably go even more apeshit.
See also: http://zerotoonebook.com
This is the path for anything to become an apex predator, right? Then apex predators inevitably lose their edge and they get destroyed by a Minnesotan dentist or invading hordes or, or, or.
So the link is apt because if one can intelligently design a new species, it has a better chance of changing the environment to its own ends than one of many of an existing species adapted to the status quo.
OHHH! Or is it that they are fucking people over, and getting fucked, but being profitable is like fucking AND creating progeny and so far Uber is infertile? Yeah, I guess that makes sense. They're fucking people over but no babies yet. It checks out.