Locals have been begging for this for YEARS!
I've had some issues with taxis now and then, but making friends on the island and hearing their stories really opened my eyes. Once you know about this, you only have to pay a bit of attention and you see it all the time.
If they would pay attention to their market and remember who pays their wages they wouldnt have the reputation they have and they would not have the citizens begging for UBER, etc.
In many parts of the world, Taxi drivers use Uber. You can call for a taxi and pay for it using the app. You can also, of course, rate the driver. Those things alone would really help, and they wouldn't cut taxi drivers out at all. The island has LOTS of taxis. This could be a chance for the good drivers to increase their rides.
Do waiters snub local diners and cater to the toruists to get better tips?
Oh, yes, indeed. The most egregious in my personal experience was when I had a waiter snub a local who was eating with me at my table! He literally brought little complimentary starters for me, my wife, and our two visiting American friends, but not for my friend, his girlfriend, or his stepson. This was at a well-regarded restaurant. My local friend said nothing, but my visiting friend (a native Spanish-speaker) gave the waiter, manager, and owner a piece of his mind and will refuse to return there. There are several places that won't seat or serve people who look too "local" even if they're well-dressed but will fall all over me even in my shabby rags. This can be an issue Mexico-wide and is a form of "malinchismo".