Here in France taxi driving is pretty hard to get into. You not only need to pass an exam, but you also need a licence that can be bought or rented from its owner, which is really expensive. New licences are basically non-existent.

In comparison the cost of the car itself isn't as important, so drivers put some effort into it. And they're more professional. I've never once in my life talked to a taxi driver in France besides entering and leaving the car.

You’ve identified one of the reasons for having nice cars, which is the relative low cost of the car as compared to buying the licence. The others are that they are only paying about 50% of the cost of their cars (as the installments are deductible from gross income), they get subsidised diesel (hence the ludicrously overpowered v6 German engines when the rest of the world is running on Japanese hybrids), and most importantly they get to use the vehicle as their personal car when not working...

Depends on where you are in Europe.

Here in Romania, taxis are consistently horrible. The cars are usually old and not well maintained. It's not uncommon to see duck taped airbags. The drivers are far from friendly.

But! They are consistently horrible in my experience. Not once has one ripped me off and they always use the meter. They know every address you throw at them and get you there safely. No matter the hour. They're also dirt cheap. 2.25 RON/km. So that's about $0.55/km.

For the Romanians reading this; Bucharest is an exception and I've had nothing but bad experiences with cabs there. My experiences are based on using cabs weekly in major Transylvanian cities.