Taxis are regulated primarily because they do business on public streets. If the only way to get a taxi were to call them up, there'd be far less of a reason to regulate them.
In any case, in many locales it's almost entirely unheard of to street-hail a taxi. To name two places I've lived, in Boston and Silicon Valley, you always need to call for a taxi, unless you happen to be staying at a hotel in a downtown area.
However, they should additionally be barred from picking up clients on the street.