For now. Uber won't break their business model alone. They will probably maintain a premium for quality. But with the precedent set, other 'brands' will eventually jump in and attempt to duplicate the technology and offer taxi-like service for similar cost, without the medallions.

By most accounts, Uber has built a great customer experience. However their technology is not really an exclusive secret sauce. The key in disrupting taxis will likely be scaling a private operation like Uber to where it costs as much or less than taxis currently do, at least on average (hard to do), or to co-opt the current taxi/limo infrastructure to improve the customer's experience and automate things (also not easy). The technology is not a piece of cake, but not rocket science either, and is certainly not the key to the kingdom.

Disclaimer: My startup (RideCell) builds automatic request/dispatch/tracking technology for fleets.