The justification for it (which I agree with, but YMMV) is that the government has regulated the Taxi industry for a long time and artificially constrained supply by limiting the number of Taxi licenses.
Since it was a player in the market, and its actions had an affect on the price of those "investments" it has decided that it has a part to play in helping the market adjust to the new regulatory framework.
If this was simply a case of foreseeable market changes coming along and disrupting the established players, then the government should just stay out of it. But this is regulatory change and the government has to at least accept that it is involved in, and a facilitator of, the disruption that's occurring.
The problem is that taxi plates were so expensive and the fees went to the government as a requirement to be able to drive a taxi. A taxi driver that spent 100k to the government for an exclusive right to drive passengers should be compensated by the government when they break their end of the deal.
They weren't paying for the exclusive right to drive passengers though. Hire car drivers could already do that. They were paying for the exclusive right to pick up people off the street without prior arrangement which they already have.
It is not that really that we shouldn't be paying for failing investments, but that some sort of moral hazard should exist for businesses who don't proactively keep up with the times.
Since it was a player in the market, and its actions had an affect on the price of those "investments" it has decided that it has a part to play in helping the market adjust to the new regulatory framework.
If this was simply a case of foreseeable market changes coming along and disrupting the established players, then the government should just stay out of it. But this is regulatory change and the government has to at least accept that it is involved in, and a facilitator of, the disruption that's occurring.