The way I understand it, and feel free to correct me as IANATCO (I am not a taxi company operator), taxis operate as essentially a licensed monopoly in most places. There are X number of cabs allowed by law, and companies have to get a license to operate a cab. To start with, that's artificial scarcity, which benefits the people who initially have the resources to buy a license, meaning the barrier for entry for the average person is higher, as well as driving up the price that a person would pay to use the service. Second, I won't go into the legality of it, as simply stating that "it's the law" is a meaningless argument, as laws may or may not be moral, ethical, or fair. Third, the general implication here is that if there is more of something, then it is somehow worse. By the same logic, we should limit the number of car companies, or grocery stores, etc. In other words, you're essentially saying that monopolies are good, and that existing businesses -- simply by virtue of already existing -- should not be forced to compete or alter their business practices. I will say that you're probably right in some respects, in that we would end up back with some sort of relatively stable model, but my issue here is the assumption that because there is a system already in place, it shouldn't be challenged, tested, shaken up, and evolved, or that because there is a system already in place, it's the optimum mix of fairness, reliability, safety, and quality.