I think it's proof that taxis weren't "an entrenched monopoly," or at least weren't as bad as the Uber's propaganda made them out to be.
If Uber's big innovation was just "pay workers less," and their competitive advantage evaporates once regulation catches up to them, it's just proof of how misleading SV smoke-and-mirrors can be.
I can tell you that I'm about as excited about the next "innovative" consumer-oriented startup as I am the next Google chat app.
I'm starting to think that ride sharing is just an area where you can have a profitable, sustainable company (taxis) but not the sustained, exponential growth a company like Uber is pitching. If Uber was happy to settle for paying drivers decent (but low) wages and operate at a sustainable level they would probably be fine, but that's a death sentence for a publicly traded company in their position.