At that got them the same or worse deal than they would get with Uber, which doesn't have a union? That sounds like a great return on union membership fees.
Though hailing cabs is inconvenient there probably is some socal utility to the medallion system beyond just rent seeking for the owners. For example the supply of cabs being steady at odd hours, and better compliance with ruling on serving all areas of a city.
I am interested in the question you pose though - about the social utility of the medallion system. Perhaps there's some benefit in keeping the number of cabs limited in order to keep the roads emptier and thus more usable?
Would more cabs only lower the utilization rate and thus earnings?
That's only true of certain areas and certain times.