Taxis are generally allowed to pick up anyone anywhere. Most cities also have a category for car services which are only allowed to pickup pre-booked rides. The licensing for these is generally a lot cheaper and not limited in anyway.

>What prevented someone from operating a for profit ride program even before Uber without a medallion?

Nothing and lots of companies do it.

> What prevented someone from operating a for profit ride program even before Uber without a medallion?

Uber scaled fast while ignoring local regulations. Both parts are important. We've seen from e.g. Zenefits [1] that state regulators are powerful. Local regulators, on the other hand, are slower moving.

Previously, a disruptor might assemble a few happy customers before the regulators slammed down on them. Uber's ability and willingness to scale fast changed that. By the time the local regulators were ready to slam down, entire cities of constituents wanted and liked the service. That changed the political calculus. Uber, and consumers, won.

[1] https://venturebeat.com/2017/04/11/zenefits-fined-1-2-millio...

Uber broke the taxi laws and dared regulators to stop them -- and they mostly won that dare. (Remember all that talk about disruption?)

Couldn't medallion holders then sue whomever issues them since they aren't enforcing the rules/terms under which they were originally sold?

They did and the 7th circuit ruled that the businesses were different enough that they can be regulated differently. The supreme court declined to hear the case, so that's how it was left.

It's the last two paragraphs of the article.

I'd guess that they probably could.

Uber generally didn't break taxi laws since most cities only give medallion owners monopoly over unbooked pickups.

Uber generally broke car service laws by not requiring their drivers to have the local registrations.