There is a lot of anti-Uber sentiment here. I think that interferes with the analysis of the situation.
I suspect that Uber actually didn't need the special autonomous vehicle permit. The engineers were correct in the assessment that it wasn't required because they really have something much less than a self-driving car. They have an ADAS system with map following, and perhaps traffic signal detection.
However the PR has been heavy on their self-driving-car future. Their limited capability has been exaggerated into something that is far more advanced. Why? General publicity? Probably not. It's likely entirely for investor relations.
Uber needs more cash. Their existing business model has cost a lot to build, and has largely succeeded where it can. Growth is slowing because of the bad publicity and the city-by-city legal battles. To motivate another investment round they need to show a profitable growth path. What better way than to claim that they are already using self-driving cars in a beta test? They can imply it's only funding that keeps them from finishing development and deploying a whole fleet of them.
California just called their PR bluff. Harris started it because she is a political hack. The DMV leaped on it because they want to expand their power. (A whole new kingdom of high tech, rather than just stamping license plates and printing ID cards.) The city of SF needs to distract from their disfunction by blaming all problems on tech companies.
Uber might unintentionally have just played this perfectly. Now everyone "remembers" that they had self-driving cars that were delivering fare-paying passengers in San Francisco, until they were kicked out for not paying for a permit. Not that they were mostly faking it, and a political power grab gave them cover to leave town before they were found out.
For me personally, I'm disappointed that I didn't get a chance to take a ride and observe their real capability.