They're not forced to pay for it. They can use other private hire cabs if they don't want a taxi with a driver with the knowledge.

Are they allowed to hail from the street?

No, if you want to hail from the street you need a taxi.

Uber doesn't allow hailing from the street either.

How dissimilar is roadside hailing from hailing a cab in-app to your exact location?

Thanks to ubiquitous smart phones these days, they are near substitutes. It didn't use to be that way.