Because if you're Uber driver doesn't follow the rules or breaks them, his cab doesn't come crashing down on a building killing hundreds of people onboard and hundreds in the building and wiping out a city block. That much should be obvious. Probably not on the same scale as a 747 crashing into a building but a threat none the less
Well no you could very easily plough into a crowded street or shop/school/kindergarten causing chaos. There still is a real threat to public safety and there have been numerous high profile cases of this very thing happening in the last 10 years.
Only to a point. It was certainly an interesting spectacle to see; a multinational disruptor (the regulated) telling state transport authorities (the regulator) how it was going to operate. For the most part they got their own way.
However, they were forced to ensure a medical for drivers, a new add on class on the drivers licence, plus insurance (strangely optional) and vehicle inspections required. So not quite a free for all.
The problem was that the governments were unwilling to actually enforce their own laws and thereby screwing all the law abiding taxi licence owners. They did the right thing and followed the law yet Uber came in illegally and screwed them all because the government wouldn't prosecute. Which then begs the question what is the point of regulation if you are not willing to uphold it?