The medallion laws are unjust and should be broken, other laws like insurance, driver training and vehicle safety are not. This is what makes the debate so complex and passionate, with people taking one side or the other depending on their personal incentives and political bias.
I don't follow the logic. Many companies have negative cash flow while they invest in growth. What is "it" in your sentence? If you're saying there are only two possible factors for the relatively low ride fares, I think you're forgetting the reduction of transaction costs.
Hailing a cab on the street is frustrating. Hailing a cab by phone call even more frustrating and uncertain. Decreasing the transaction cost increases demand, which encourages supply, which lowers cost, which ... Anyway, there's a new equilibrium price.
Are you an Uber employee revealing private information? If not, it seems you're making a big assumption about the proportion of their expenses that are marketing and growth versus steady-state marginal cost.
Amazon didn't make profit for a while and everyone wondered if they could. Oh, it's a low margin business, they'll never be profitable, blah, blah. Turns out they can, in fact, make a bit of money. Maybe Uber and Lyft can, too. Delta can, even though flights are a commodity business.
Oddly enough, I was thinking the same thing.
You've asserted that they're ignoring cost in their pricing, but have provided no evidence for it. Uber and Lyft have claimed to be profitable in their biggest markets. Doesn't that suggest they set prices above marginal cost?
In any case, even if they're not currently profitable, that may be because of capital expense, not operating costs. Until they go public, it's hard to know.