How can you reasonably have 500 drivers vying for the same fare and also have 30 people in a 8 person minibus? What is the motivation to overcrowd?
Erm, the motivation is easy money. The same thing Uber is promising.
I haven't been to Kampala, but I've seen the same thing in SE Asia, in fact it gets worse there. unlicensed taxi drivers tend to form gangs, create turf and fight over their territory. Thailand is a good example. In Bangkok where taxis are regulated they are cheap, easy to find, safe and reliable if you dont feel like using Bangkok's good public transport, a trip from the city centre to BKK airport (35 KM) is a mere 400 baht. In Phuket where there are no taxi regulations taxi and tuk tuk drivers refuse to turn on less than 200 baht. So you'll take the bus then I hear you say, well good luck with that, whenever the government of Phuket gets it in their head to set up a municipal bus service (baht bus) the drivers are stopped, dragged out of their buses and beaten by the taxi mafia.
Dont take my word for it, google "Phuket taxi mafia", "Tuk Tuk mafia" or even just "taxi mafia" (the first google result should be for Phuket).
There are many examples of this, such as what happened when South Africa deregulated their taxi industry.
We have taxi regulations for a good reason, sure I'll be the first to admit they aren't perfect, but having lived in places with the alternative, the worst protectionist policies are better than that.