Doesn't this seem like a lost cause for VC's?
Edit:
I get that the service they provide is hugely beneficial to the customers, but if that is only possible from breaking the law, then it's doomed to fail.
E.g. If an airline company provided extremely cheap flights, by having people who just received a license to fly be the captain, then you are asking for trouble, legal and illegal.
Truth be told, if Uber pivoted to instead of cutting out the taxi companies, instead delivered the app as a service for the taxi companies, then they could probably optimize their respective companies to be able to provide taxi services cheaper and with better service.