If the private market provides a service at a fair price, and consumers like it, why should the city try to duplicate it? It would be a waste of taxpayer money for the city government to try to clone a business that is doing just fine already.
Why draw an artificial line between cities and private markets? Innovation isn’t the exclusive domain of for profit companies. Part of the reason why we end up in these situations where public utilities are in such an embarrassing state is that we don’t expect or allow them to innovate, even down what is now a well proven pathway.
It's not an artificial line because of stuff like this, which you mentioned:
> specially zoned drop off, pick up, and lane privileges that Uber and Lyft don’t get access to
There are clear differences between the state and private businesses. The state can make laws to prevent private businesses from competing with it, can grant monopolies, etc.
The state is not operated for profit, and the profit motive is the only reason things like Uber and Lyft exist -- the state never would have thought to create something like that.
