I think in most countries the drivers get paid by the taxi license holders and usually can make more money and/or more have more flexible working conditions driving for Uber.
No, their customers revolted. If a business based on "Get in cars with random strangers" beats you in the marketplace, your business model sucks and chances are good that you do, too. That's the taxi industry in a nutshell.
I was betting on the taxi drivers revolting, but the capital markets have prevailed