I have no idea of the Portland specifics, but a lot of law, especially administrative law in an hoc process. City hall could say "we think you are operating a cab service in violation of our regulation don't operate." But the reality is nobody is sure whether Uber is actually violating the law. You either let city hall sue/make an admin finding or you preemptively sue them and wait for a court to decide.

Plus sometimes you know how bad the worst case legal scenario is and it's the best option. With stuff like taxi regulations the fines probably aren't too bad.