Uber cabs are not public hire (that would be black cabs in London), they're private hire. You can't flag them on the street. But I have no problem with the ruling. You need to be able to talk to your taxi driver. You might have a preferred route, or need to give instructions round a one-way system, or tell them to let you out at the shops. It's a customer-facing position and it demands a certain level of communication skills, in this case an acceptable standard in the nation's official language.
And it's not like Uber are sticking up for the hard-working, hard-done-by drivers here. They just need warm bodies to keep accruing marketshare until the Johnnycabs are certified and they can ditch the lot of them.