The way I see it is that Uber will have access to all the data. If they make more or less on a fixed fare. With all their data I'm sure that their losses will be minimized and eliminated quickly and as a result we, the passengers will pay more.
The other thing is that whereas there is a big notice at present when surges apply (which turns some off booking), it seems it is mostly not indicated if surging is on.
You just see Price: "$34.70" or whatever amount and have to make a call whether you book or not, without any other cues (if unfamiliar with the route), or whether the price is affected by surge, or just heavy traffic.
As most people don't have a base against which to measure whether the price is unreasonable, or higher than traffic alone, they're more likely to go ahead with booking as long as it's not ridiculously high.