Taxis are a quasi public service in most regions. The gov't requires taxi drivers to take fares that are virtually impossible to do profitably. Either the fare is so expensive that no rider could afford to pay (Think $300 to get home) or there are no drivers because there's so few fares at that time that the fares don't cover operating costs. You could argue that this is the way it should be, but only if you ignore that reality you like so much. How many of these late night fares are from folks that would otherwise be driving drunk?
The other bit of reality that Uber likes to ignore again rests on the quasi public nature of our civilization. Specifically we base the quality of life on several job perks Uber is actively trying to get out of (Minimum Wage, Health Insurance, Unemployment Insurance, Taxes to pay for social services, Business and Drivers Insurance, etc, etc).
Basically, Uber is only profitable when they externalize their costs, similar to what Walmart is doing by paying their employees so little they qualify for food stamps and local gov't's free healthcare. We could tax Uber to make up for this, but it's almost impossible with all the tax shelters unless we're willing to start making direct attacks on our Ruling Class (good luck with that).
Uber will go one of two ways: Either the whole house of cards will fall when people decide they have to uphold their end of the social bargain or an entire generation of workers will be driven into abject poverty by the race to the bottom.