How am I supposed to use nvidia-prime?

You need to have both Nvidia proprietary drivers and nvidia-prime to get it working. This can be done by running

sudo apt-get install nvidia-346 nvidia-prime

for Ubuntu 14.04 and 15.04.

Then you will have Nvidia X Server Settings in Dash. And there you can find PRIME profiles.

you can also do

sudo prime-select intel 

(or nvidia or query)

Ubuntu 18.04.1 repositories have been updated with a partial backport of work from 18.10 which dramatically improves the Optimus experience. To call it a night and day difference doesn't do it justice.

But when you are in intel-only mode, the nvidia GUI control panel does not launch. This will fixed since it's not a problem in 18.10, but until then, use the command line approach. I suspect the fix won't arrive until 18.04.2