It's not so simple. Taxis were granted a monopoly in order to serve as an extension of cities' public transit. In return, they lost the autonomy of a normal business. They can't set their own rates. The government sets rates. They aren't allowed to use surge pricing to match supply and demand. Indeed, in many cases they're not allowed to use a GPS-based method to compute the fare, which increases the difficulty of implementing an app.

This level of intrusion into a private sector business would be inconceivable today, post-Reagan. But taxi regulations were implemented at a time when this sort of thing was standard practice.

So you've got all these people who invested into these businesses with these regulations on the explicit promise the government would protect them from competition. Taxis are upset about having to compete because the whole deal was they would not have to, in return for regulated rates. But heavy regulation destroyed any possibility of innovation in the taxi industry. So you have to let ride sharing operate to move forward. But what do you just reneg on the promise to taxis?

I don't think taxing ride-sharing is an ideal solution. I'd prefer the state to just buy out the monopolies using general tax dollars. But it's not totally out on left field if you keep in mind the state isn't free to draw on a blank slate here.