It's easy to cut prices if you just exempt yourself from the labor laws everyone else has to follow.
Not only themselves but drivers and customers too. Uber, their drivers and their customers benefit from not being covered by those labor laws you're talking about.
It's bad for politics and the traditional taxi industry because they get less from the cake.
Taxi drivers were already exempt from most of those labour laws - they were already considered contractors and didn't have overtime nor benefits.