Government is just an abstraction. There were early taxi companies that lobbied for a monopoly for themselves. They asked for laws to establish a hard limit on number of licenses available. Then, they cashed out nicely because supply of taxis was limited with police force, but demand was growing. Later taxi drivers just had to buy the permit and now they are also interested in keeping the existing laws (or they lose a lot of money). There is no magic at all, pure economics + violent intervention via police.

Except none of this is true in this case - Sweden. The only regulation in place is consumer protection (driver's licenses, reputable businesses, regulated taximeter, comparison prices posted on the cars). There's nothing protecting driver's interests.

So variable pricing is regulated out of market is what you're saying.

What do you mean by variable pricing. Haggling? Having the costs vary by time is fine as long as it's detailed on the pricing sticker.

Edit: here are the details http://www.transportstyrelsen.se/Vag/Yrkestrafik/Taxi/Prisin...

Uber could use this standard exclusion: "Tariffs by written agreement exclusively for a particular customer or passenger category do not have to be reported in the price data."

edit2: I'm reading the law now. There are massive loopholes all over this thing. Uber could easily implement their standard business model within this framework if they'd just comply with a few things http://www.transportstyrelsen.se/Global/Regler/TSFS_svenska/...