The problem with your line of reason is that most Taxi drivers are NOT paid by the hour. They rent the Taxi, and have to pay for the fuel as well.
Getting paid by the hour, they would make money.
I cannot speak to how its done in New York City, but in this state drivers are contract labor with no benefits and pay by the hour.
Being a Taxi driver is very much like being a Truck driver and they are both jobs that no one who has ever done would WANT to do.
Most times it's that they need 'quick' money to pay bills and don't have the time or money to get a better education since in this county you have to PAY quite a bit for that education.
I believe that lower income contract jobs are basically a way to get around the minimum wage. If you look at places that pay contract rates for things like taxis, newspaper delivery, magazine subscriptions, envelope stuffing etc., you will often find if you do the math that they are not making the minimum hourly wage. Not only that, but because they are contract labor, the company "employing" them does not have to pay Social Security, Medicare or Unemployment insurance.
Some of these jobs it is POSSIBLE to make more than minimum wage if you really work your butt off.