If they can kill the competition they can then crank the prices back up and profit of this for years and years. It feels slightly 'evil' but it does make business sense, especially if they know they can outlast their competitors.
They can do that, if they want anti-trust problems. I bet Uber wants Lyft to survive so they can have a substantially similar competitor to point to when the government's lawyers come knocking.
At that point, any (future) new entrant to the market will face a steeper uphill battle than Lyft did. In the process, they may lose some customers to real cars or public transit, but they'll remain the only player in this space.
If Uber succeeds in killing Lyft, they can dictate pricing more effectively and harvest a surplus from the remaining consumers.
Crucially, Uber doesn't own the cars nor the drivers. Anyone willing to throw more cash to drivers and take less cash from riders (with the infusion of VC funding) can instantly steal both the supply and the demand from Uber.
The problem for uber is that I am paying the majority of the cost of owning a car, the parking space, either way, so switching back to driving myself has a low cost. Housing situations I want that don't come with "free" parking are few and far between in my area.
Now if uber would bully the city into letting someone build a parking free tower of studio condos? Yeah o.k. Maybe they could exploit the lack of competition to get me to pay a lot more for transport, but as it is, they need to keep the price below what I would pay to read for twenty minutes rather than drive, and I am not sure that would add up to a market clearing wage without some vc largess.
If Uber gets big, expect this to happen in addition to blocking the construction of effective bike lanes.