This is a safety thing, not a competition thing.
1) You can drive a car in Germany if you meet some basic legislative requirements (Führerschein etc.)
2) You can carry a friend as a passenger - perfectly legal.
3) You could carry a stranger who asked you for a ride - perfectly legal.
4) That stranger could give you gas money - perfectly legal.
5) But if you use your smartphone to find strangers willing to pay you for a ride at this point your activity becomes so unsafe that you need to jump through a whole bucketload of extra hoops? Why is that exactly?
5 is not about safety. You enter a regulated market once in case 4 the money you give to the stranger exceeds the cost attached to the ride, smartphone or not. On top, you have no insurance coverage anymore.
When you get to number 5 you have a commercial company and an individual, and that changes the relationship.
Here's a US example.
I can drive a car, but if my employer asks me to take a parcel from work to the post office to be posted I need to make sure my insurance covers that commercial activity or I am uninsured.
Why are people in favor of using tax dollars preemptively to defend extremely-profitable insurance companies? If their customers aren't following their contracts, the burden is on them - and I don't see a problem with that. Its not Uber's fault.
In the meantime, Germany is banning a company that has shown they lower DUIs upon introduction.
The moment you're driving people around for profit you're entering a regulated market. Deal with it.
To me having insurance valid for commercial use seems reasonable, but you don't need special licenses or laws to enforce that. Just have a law that says "you must have insurance valid for the kind of driving you do" (which I suspect Germany already has).
The basic point being made here is there is no technical or medical reason why the amount of money being charged suddenly makes driving fundamentally different. You're driving the same car on the same roads with the same driver. So why have governments made it so complicated?
Licenses provide the proper checks and balances proving that the driver has complied with their legal requirements. The license is typically shown somewhere in the taxi, so the fare can see that they are covered if anything bad were to happen.
That's of course assuming the fare knows about this, which for foreigners isn't always the case.
This is everything the court asked for: Appropriate insurance and regular checkups (yearly instead of biyearly).
And that jurisdictional difference exists because it is profitable for cities. The consumer does not benefit at all.
So he will spend more hours on the road which is more demanding for him as well as his car, which is why it requires more regulation.