They can consider themselves a sovereign state for all that means.
Uber provides a commercial transport service even if they're simply contracting out the actual transport to someone else. So it should be up to them to make sure that the drivers they use meet the regulations of the country. Nothing here is saying that Uber cannot provide transport services. Just that they need to provide them under existing regulations.
Now if they do not wish to do this they have two paths of recourse. Either not enter the market, or lobby for a law change.