Taxi regulation for safety reasons increases the trust in taxis for people that don't know the area: tourists.

Harp about personal freedom and responsibility of the state all you want, but the regulation is for people that don't know the area and could get hurt by stepping into the wrong car. Because when the day occurs that a tourist is kidnapped or hurt because of this service, it will ruin the local industry. Uber may not care about the locals once it is sufficiently global (what's one city?), but the municipality does and this is precisely the reason why they're stepping in.