I believe it's not just the investors who are subsidizing Uber rides. It's also the math-challenged drivers. And there seems to be excessive churn in the driver ranks, as evidenced by the increasingly abundant and aggressive recruiting ads I hear. Once drivers figure out they aren't really making money, they abandon the gig.
A not too sharp friend of mine recently started driving for Uber. He was excited to tell me he made $1000 in his first month driving part-time. So I asked him how many miles he had to drive to earn that. About 2200 miles, he said. I pointed out to him that driving a late-model car like he has costs about 50 cents per mile, including depreciation, maintenance, fuel, etc. Not to mention the self-employment and other taxes he will have to pay on his income. In fact, he didn't even realize that he would have to pay taxes or that Uber would be sending a Form 1099 to him and the IRS.
One driver told me he rents his car by the day and even driving 12 to 15 hours he often doesn't make enough to pay the daily rental fee.
I don't see how this scam can go on much longer. It shouldn't cost Uber much to just run a website and payment system, but as long as investors and drivers have to subsidize the fares to attract customers...