Uber could follow the regulations, charge approximately the same as a taxi, and still make a moderate profit. There's nothing about Uber's business model that says they have to be cheapest or have a monopoly. The only reason they choose not to do that is ambition (or greed if you're being less generous to them).

This is just Uber showing governments around the world that they're willing to leave a market entirely if they don't get their own way. Uber are betting on their customers becoming vocal opponents of the regulation and lobbying their government to change the law in order to allow Uber back without the rules, and for other governments to become fearful of enforcing their regulations in case they anger Uber's customers too. It might work. On the other hand, maybe people aren't actually that bothered about which particular ride company they use, and Uber's strategy won't work. It'll be interesting to see what happens.