I believe there is a large investment in becoming a taxi driver in London. It takes years of training (see, the Knowledge[1]) and money. Uber drivers presumably do not have to make such a big investment, so permitting them to go without the same regulations taxi drivers need creates a lot of extra, cheaper competition.

I also suspect that the taxicab regulations would prohibit taxicabs from using alternative meters, so taxi drivers could not be Uber drivers at the same time.

[1] http://en.wikipedia.org/wiki/Taxicabs_of_the_United_Kingdom#...