I doubt the driver was trying to trick tourists. I've taken taxis to jiufen on a few occasions and drivers always typically want a fixed price that varies with each driver. This is with Taiwanese friends doing the negotiating.
I think it's somewhat understandable given it's a long way out of Taipei City and there's no guarantee of being able to find a return fare.
To me it sounds clear that uber has benefits there in that case, unlike the grandparent is claiming. Most consumers favour constant prices without surprises, and dislike negotiation processes.
I feel this is the issue with Uber, the price doesn't take into account the destination and probability of finding a return route customer. For example, I've talked with lyft drivers in Seattle who have picked up people in downtown who then say their destination is Tacoma or even Olympia (which can take anywhere from 1 to 2 hours depending on traffic). That's 1 to 2 hours away from anywhere the driver normally operates, and with very little chance of finding a fare for the return drive. It would be fair if the fare was adjusted to take into account these important variations.
I think it's somewhat understandable given it's a long way out of Taipei City and there's no guarantee of being able to find a return fare.