Uber and Lyft operated 100% legally in NYC from their inception. The NYC ride-sharing market is not like other US cities, which allow peer-to-peer ridesharing. All rideshare drivers in NYC are licensed by the TLC, and Uber and Lyft are licensed TLC operators.

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.