They really, really should.
The main constraint on denser commercial and retail on streets like South Lamar is not traffic, but parking. An architect friend told me that a surface parking space needs a minimum of 325 sf. That's a lot. It's so much that many of the small strip malls on South Lamar wouldn't be redeveloped even if parking minimums were eliminated. (The City imposes other significant hurdles to redevelopment, of course.)
If every trip is by car, then we need more parkings spots per car. The right way to think about taxis is not as an alternative to a car trip, but as an alternative to parking.
Taxis are also important to people who want to go car-free. These people need a range of travel options. Buses and bikes aren't enough. Car2Go and more traditional rentals fill a niche. But taxis are important, too. Some trips don't warrant renting a car but are too cumbersome to make by bus.
So a healthy urban environment needs reliable taxi service at reasonable cost. The City makes taxi service less reliable by making taxis scarcer, and it makes the rides more expensive. It thereby encourages more parking, albeit indirectly. Urbanists ought to care about this. They ought to complain.
