Legislation is designed to serve the people. It also gets outdated as times change. It's something that's never done and will always be in constant tension with how society and business transform.
Copyright/patent law and same-sex marriage are two quick examples of things that clearly need legal review as the world has changed. We wouldn't just say: "well that's how the law's written so that's how it should be and everything against it is wrong" would we?
Uber's success is an expression of the general public's desire for a different and better system. Taxi's aren't extinct, they're still around and they've even made lots of upgrades to try and win back customers, however it's pretty clear that ride sharing services just provide better quality and value. I personally believe there are some rules that should exist (disabled/wheelchair + underserved areas) but it doesn't need an entire encumbent taxi industry to remain solely through legal mandates. When there's such growing demand for a service, we should start looking at whether the legislation itself needs to change.
BTW: With all the self-driving cars stuff happening, both taxis and ride share drivers might be out of a job anyway, and our current auto laws will definitely have to change when that becomes a real thing.