Do you pick a contractor or dentist after examining their licenses? No, you consult friends or websites like Yelp to determine the sellers' reputation. Feedback from customers is more useful than any bureaucrat's stamp of approval. Internet apps like Lyft's make this feedback ever better.
Will government crush innovations like Lyft? Maybe. Seattle moved to limit it. Nashville declared it illegal to charge anything less than $45 for rides, so there's no way for a company like Lyft to compete by undercutting regular cabs' prices.
Regulators want their fingers in everything. A new idea gives them an excuse to draw attention to themselves as "consumer protectors." In addition, existing taxi companies request regulation. They want politicians to regulate new competition out of existence.
Luckily, technology and capitalist innovation sometimes move faster than the lazy dinosaur that is government. Lyft, Uber and Sidecar have quickly become popular, and this may help them avoid being crushed. By contrast, politicians don't hesitate to destroy things that people think of as weird or dangerous.
Ride-share companies, perhaps sensing that it's better to ask for forgiveness than permission, offered rides without first seeking approval from every regulator. Now they have millions of customers. Politicians often fear regulating things that are widely liked.
Government is as crude and annoying as a speed bump, but individuals looking for better ways to do things keep cruising ahead. Sooner or later, if we restrain the regulators, the market might even produce flying sleighs.