Yes, they lost control of road traffic enforcement as well, but not to the extent that they lost control of the taxi industry. Having some form of regulation would have kept the taxi operators busy evading the state rather than acting with criminal impunity (maybe even behaving better to not arouse suspicion), a better result than what actually happened.

And the state is stronger now than it was in the past, but the legacy of deregulation lives on - getting the genie back into the bottle is harder than letting it out.

Same crime, only institutionalized, sanitized, and socially acceptable. "Sanitized and socially acceptable"...sounds good to me.