One entity has a public purpose to provide effective public transport across a wide area with different routes of variable profitability. The other has a goal of claiming the profitable routes and ignoring the non profitable ones.
I just don't follow. There is no "claim"; the municipality can run on the "profitable" routes, too. They don't have to turn a profit, though, so they can always undercut Uber (unless Uber intends to use their previous strategy of taking losses on each ride until the competitor goes out of business, and I don't know that any city would stand for it). So, then, the only reason to use Uber's routes is because they're more comfortable or direct. However, in that case, they're obliged to charge more per passenger, at a rate approaching the cost of a private Uber ride.
Maybe their goal IS to run city busses out of business. Maybe they're about to FAFO.
Obviously it depends on the municipality, but in the UK for example, there's a (IMO deeply misguided) view that public transport should be cost neutral. That is, the bus services in a city, say, should not be subsidised. This is to the point that it is actually illegal for city councils to run a bus services. The private contractors are consistently pushing against their minimal service obligations in areas that are less profitable.
