Uber claims their drivers already meet the requirements, but if Uber doesn't register with CPUC how can they know if it's true? Are they supposed to take Uber's word for it?
IANAL and I don't know if the lawsuit has merit, but there is slightly more to it then just someone stamping their foot and yelling, "Unfair!"
It doesn't always work out this way, but I think in the case of companies like Uber, the interests of the company, the customer and society as a whole all align. To be able to make a profit, Uber needs to be perceived as safe. The most effective way to do that is to actually be safe.