The tough thing is that while they can provide a better service (let's qualify that - cheaper, faster, easier to book) they don't do what taxis need to do to be useful - objective model for when they can and cannot refuse a ride, effectively guaranteeing service by some provider.

If they run taxis out of business by stealing the cash cow of inner city rides but don't replace that somehow then that'd be the worst kind of disruption - disrupting the customer in a horrible way.

And if you're in the inner city and get the better service from Uber nobody can blame you for using it. But I can definitely see why regulators have genuine concerns around the people served by taxis who won't be worth ubers time.