Will they be able to compete on price if they do that? Commercial insurance is usually more expensive.
Sounds like the current low prices are the result of cutting corners and not having adequate insurance. Which makes me side against Uber here.
There's no economy of scale that's typical of technology companies here - Uber drivers are not able to buy cars cheaper in bulk, get a better deal on gas, or buy commercial insurance at much cheaper rates. Hertz or Avis have a better cost structure than Uber.
The price advantage comes from skirting the regulation on taxi medallions (only relevant for a few large markets like NYC) and skirting commercial insurance requirements.
Can they even be considered to be competing now, if they can't assure me that the driver will be able to cover expenses if he injures and/or kills me or other passengers?