DMV says UberX, Lyft drivers need commercial plates

As long as the DMV applies the rules equally between traditional taxi companies and UberX/Lyft, then I don't see an issue with it.

Even if it is more expensive, as long as the expense is reasonable and fair between all competitors then nobody is any further behind than anyone else.

I'd be interested to see data on how many of their drivers actually work only 4 hours a week, all of the anecdotes by their drivers I have read is that they're essentially full time (however some are full time but spread their work between both companies, or partly for one company and partly as a driver for pre-arranged jobs, like taking disabled kids to special schools).