The reason they're limited in Vancouver (as an example) is because the structure is divided three ways; the cab companies (e.g. Yellow Cab, Black Top Cabs, etc.), the vehicle owner, and the driver (though some few drivers own their vehicles).
Drivers pay a fixed/minimum amount to the vehicle owner and the cab companies, and then they drive around to get as many fares as they can so that they can make sure to make enough to cover their costs, after which they start making a profit.
With more cabs on the road, there are more fares to go around, which means that drivers have to split the same number of fares over a larger pool of drivers, which means the entire industry gets poorer; everyone makes more money except the drivers, who need to start being more aggressive, cutting corners, cheating, ignoring regulations, etc. just to make a living. No one wants that.
Drivers pay a fixed/minimum amount to the vehicle owner and the cab companies, and then they drive around to get as many fares as they can so that they can make sure to make enough to cover their costs, after which they start making a profit.
With more cabs on the road, there are more fares to go around, which means that drivers have to split the same number of fares over a larger pool of drivers, which means the entire industry gets poorer; everyone makes more money except the drivers, who need to start being more aggressive, cutting corners, cheating, ignoring regulations, etc. just to make a living. No one wants that.