Nope. With induction proofs, you have some statement P(n) that is either true or false for some value of n. In this case, your statement P(n) is "Un is greater than 1." You first want to establish that P(n) is true for some specific value of n. Then you want to show that if P(k) is true, then P(k+1) is true.
For n=0, you're given Un=2, which is obviously greater than 1. In other words, P(0) is true. You're not trying to show (at this step) that
U_{n+1} = \frac{U_n^2+U_n}{1+U_n} > 1
Now you assume P(n) is true for n=k and show that this implies that it's true for n=k+1.
Your induction hypothesis is P(k) is true, that is, Uk>1, and you want to prove now that Uk+1>1. According to the recursion relation, you have
U_{k+1} = \frac{U_k^2+U_k}{1+U_k}You want to show the righthand side is greater than 1 because that means P(k+1) is also true.