If it's the latter, then it's not really helping the environment much more than cabs, correct? For me, that means taking a cheaper option (and supporting someone's profession, rather than someone who's just making extra money on the side), is better.
2) It's not helping the environment more than cabs, and probably does more damage than cabs. I've seen a Ford F-350 Superduty with a pink mustache picking someone up. Cab's are usually Toyota Prius'.
3) As of recently, it's not cheaper than a cab.
4) It does allow drivers, who often have full-time jobs during the day, make extra money on the side.
Mass transit coverage (see: BART or MUNI light rail) is also non-existent in the vast majority of the city, making sketchy, infrequent buses the only alternative.
This is combined with an extremely corrupt taxicab lobby that has successfully prevented the growth of the cab fleet despite an increasing population, making SF a notoriously difficult city to get a cab during busy times (Thurs, Fri, Sat nights). Taxicabs are also poorly regulated, quite often picking up a passenger on the way to another fare and simply abandoning the request, as well as sketchiness with accepting and processing credit cards.
SF is really the perfect storm of regulatory and governmental failure that has allowed the rise of Uber, Lyft, Sidecar, etc.