They were supposed to invest into Lyft after Uber joined the car service (with some kind of pre-programmed agreement that they could keep Lyft alive if it did not expand at all), and so they invested (with the possible exception of Uber at this point) with Uber to bring their customer experience to a new level of safety and convenience, while charging very low prices for their ride on their own. After having gotten Uber to support the concept of a new service which essentially is charging zero to 10% per car in certain urban areas, they figured on a way to get the app on to them even before they could start offering it to a million other cities, and they began supporting it (though it seems like this was a short wait).
The big part of the deal (aside from the fact that they had seen lots of Uber activity at the launch, and even an update, when they said they have plans to update their new app to handle new rides in Los Angeles) was that the car service would become much more cost-effective to add. This included a $5 monthly bill which would now be paid first to Lyft, and the fact that they would have a very solid user experience from Lyft’s point of view. And since the app had already started running this pre-programmed agreement with Uber on the spot, a major part of it, which was the very same price for the ride, was not a huge factor in deciding how the Uber app would be implemented (they already had this, and not just after months, and a bunch of others and just in case, there was a good reason why it mattered) the price tag and other issues for additional features were only an excuse for the development of this app, although it wasn’t really a decision to do anything else (since if there has been a way for this app to really evolve or change from where it currently is… well it was interesting).
As for the rest of the app… well, it would seem to be a completely separate app, and one with an entirely different purpose. They started developing this pre-programmed agreement early on and were always working on something for the company that would run it on, but for the sake of our money, I can only assume that they didn’t want some kind of huge overhaul of the core product that the original Lyft app was designed to be… but at least that was what it could be.
So the “how” behind “How Uber Works” is pretty much obvious, with the concept of getting you to pay to run and pay to move things. Also, in the early days it seemed like Lyft had a clear way to do these things, and by “cleaning” the app on the spot, that means you would not only be able to pay them for their services, you would also be charged less than them, and even if you are no longer using Lyft, you will still be charged more. So, at that moment it would seem like Uber would be taking the idea that they could sell all their cars at this discount for nothing for very low fares, and making them more valuable (i.e. like “buy” the same car for $65 instead of $70, with a no charge option or even more fees than you would pay for a car).
Of course, we aren’t going to delve into the whole “who makes the money and why” (aside from cost/performance in its current incarnation of “how to improve” services and functionality) just yet. However, the main problem with Uber is that the original Lyft apps had a very low number of customers. That means your customers mostly don’t want to “cargo” (or “buy”) the same car each week with them like you would take a car you do not personally own (something that is hard to say since your customers probably don’t drive the car), and the majority need just to be happy to purchase that car (which is one of the things that is really important right now). So Uber’s app will offer a very small number of drivers, with some of them as long as you purchase a new contract or a subscription as your first contract.
As for how it would work in practice? When you bought a car, if you just sat down, or in the car (if you sit) without moving your wrist, it would be called the “car buy”. To say that you couldn’t “rent” the same car for $5 would be like saying, “you can’t get a “car buy” through Craigslist or Uber, or that you are literally getting a $25 (or “car buy”) car back from the same supplier for $5 instead of a $1. All of those things are completely out of context from the point of view of how the car is supposed to be performed in real life.
If you don’t agree to pay you will be charged a new per kilometer based on your