[kuschku]

Simply because of the tragedy of the commons.

These people would have worked as taxi driver before, often with better compensation and job security.

But as soon as one person offers rates that are cheaper, all of them have to, or they won't get anything.

Uber drives competition between the employees, and as result, they all get less.

Simple economics. And also the reason that only unions and government regulation can ensure acceptable work conditions

[malandrew]

No, they wouldn't have worked as taxi drivers. Maybe 1/10 of them would have ponied up the money for a medallion (assuming some corporations didn't already purchase many of the medallions in the market to be able to extract rent). The rest however would have one fewer option.

Taxi drivers have earn like 30% less relative to before Uber, but there are 10 times more drivers that now earn about the same as the taxi drivers. That's a massive net growth of opportunities to earn money.