That makes no sense. Idle cars don't make money and therefore have no incentive to stay in the business for long. The biggest problem with Ubers and taxis right now is that demand for drivers is way, way higher than supply. More Ubers/taxis on the road means less waiting time, more carpooling, less car ownership and less idling, not to mention lower prices.

Why? it won't last for long ... it'll balance out as drivers realize it's not profitable.

Let market forces do their job. It's reasonable for government to regulate safety, but not supply.

You're assuming it's a binary condition.

I think there is a substantial gap between "excessive supply" and "SO much excess supply that the drivers are losing money".