A cap on surge pricing doesn't show economic illiteracy. It is a choice made by the people (represented by the government) to prefer longer waits over higher prices.
These decisions should be discussed based on the merits of the decisions themselves, not simply assuming that the politicians took everything into consideration and understood all of the consequences. There are many of "the people" who will wholeheartedly disagree with these price caps.
If two individuals agree to a price, what makes the politicians brilliant enough to tell them what the right price is.
Cab companies are locally based, therefore have more to lose from loss of business in any given market, and are more likely to have connections to local politicians. So parent is suggesting that cab companies may use their political influence to try to shape policy in their economic favor.