Anecdotal of course...but I live in the backwater of NYC and it's certainly NOT uncommon to see check engine lights on in Taxis.
It's also incredibly COMMON for taxi's to be horrible drivers (exactly as stereotyped) and either drive much too fast, much too slow, or take routes that make no sense (other than to increase fares), be on the phone despite the prohibition, and so on. Sure, NYC has plenty of rules and a complaint system...but it also requires you going to testify. Who has time for that just to back a complain that your drive decided to go around the block an extra time and was on his BT? Oh, and that assumes 'Muhammad' is actually driving with his own license, not the one he shares with his 3 cousins.
I'm not saying it's impossible to manage taxi's properly, but your perspective doesn't align with reality by a long stretch.