For example, anyone who's seen more of NYC than just JFK airport and Times Square knows that that city has plenty of unlicensed rides available. This was true long before uber: white cars whose driver will only say "do you need a taxi?", and dollar-vans are everywhere. Yet, even though they offer an identical service to a licensed cab, people value them far less and fares are often 1/4 what's paid for a yellow taxi.
When it's an officially licensed taxi, you trust that their fares are regulated, your driver isn't a violent criminal, and that their vehicle's in safe working order. This is the real value uber brings: geolocation and well-designed apps are nice frills, but ultimately people are deciding more and more that they trust a business with a rating system for drivers + passengers, upfront rates (even if they vary), and GPS so in the unlikely event you are detained, you can be found.
Seriously, unless you're a lawyer, I have no idea why you'd go around debating what's legal or illegal. Instead, as citizens, we should look at the regulations we have and ask if they still serve to protect people as they once did, or if they now exist to protect political and business interests.