Uber and Lyft were largely operating illegally when they started in most cities. They ignored expensive licensing requirements. They ignored safety regulations. They ignored insurance requirements. They ignored price controls on fares. They ignored requirements to accommodate disabled people.
Taxi companies who were obeying all these rules (which all imposed costs on the taxi companies that Uber and Lyft did not have) had a reasonable expectation, perhaps even a right, to expect the city would force Uber and Lyft to follow those rules too, or would shut them down. But the cities didn't, so I think a good case can be made that the cities owe the taxi drivers a bailout.
Uber and Lyft beat NYC taxis fair and square - they used the existing TLC regulations (with the overhead required) and won out because of being a better product.
[1] http://web.cs.ucdavis.edu/~rogaway/classes/188/materials/pos...