I don't see what's the complex externality here- they can't raise prices significantly because they're legally prevented from doing so. 'The people with the guns & the legal monopoly on force forbid it' is pretty simple.

To my understanding the only people making non-poverty wages in the taxi business are owners who purchased 'medallions' decades ago- aka another governmental licensing restriction. I believe they frequently lease out the cars to drivers who make minimum wage or less. I'm not sure an individual taxi is necessarily profitable on a per-car basis