It boils down to the lack of a reputation system. There is little incentive for drivers to behave in a good way, because anything bad he does won't directly impact him, beyond maybe make people avoid taxis altogether (which seems unlikely, as taxis are usually a last resort when you have no other realistic options). And it doesn't take many bad apples to spoil the bunch.
One of Uber's main contributions is changing this dynamic.
One of Uber's main contributions is changing this dynamic.