That is certainly possible -- although I tend to give them the benefit of the doubt.
However, if that were the case, why not just say no license? Why give an opportunity to Uber to show an improvement in their numbers? And why do it twice?
It's not all or nothing, and no one is suggesting that the taxi commission is 100% corrupt and in thrall to Big Taxi. The way they're approaching Uber is likely a compromise between kowtowing to business special interests and serving their constituents (as pretty much all policy in every country is).