No, restricting the amount of cabs is good, actually. It's very annoying if your city is overrun with cabs. The restriction needs to be reasonable but dense cities like NYC would just trend towards 100% cabs if you let them. And then nobody can drive anywhere.
Well no, because that's not what happened with Uber. You get more cab drivers, but there's a population limit on cabs based on various factors, including the fact that people don't always want to take a cab.
This is mostly a problem with the people you pay taxes to who would invent systems to restrict the driver numbers.