Before Uber, taxi medallions in New York were selling for around $1 million. These pricey medallions tended to get bought up by large companies that could afford the investment. Your driver likely couldn't afford one, so instead, drivers would rent a cab and medallion for about $100 per 12-hour shift, on top of the dispatcher fees.
This system was supposed to restrict the supply of cabs to ensure drivers earned a decent wage. Instead, all the value is extracted by the medallion holders.
Still, that doesn't mean rainbows come out of Uber's bum - it was absolutely a market ripe for new competition, Uber just added that competition in a terrible manner.