What? There was a thriving free market and suddenly the public taxi-regulation-and-rationing scheme out-competed everyone else?

No, there was a thriving free market and the public taxi regulation scheme shifted the negative externalities that it was empirically observed to generate back onto the cab companies.

Regulated businesses don't "outcompete" unregulated businesses. That's why they're called "regulations" and not "features". You can argue that regulation is stupid, but:

* We won't settle the argument, because every point you make about competition I'll respond to with a negative externality, like, "anonymous unmarked drivers killing people by running red lights".

* You won't be refuting my original argument, which is that states are not crazy for getting upset by PickupPal.

Aha! Color me ignorant, then, that makes sense.

:)