Less so than people actually driving themselves around the centres of cities.

If I drive myself to somewhere in the centre, my car will sit there using up space while I'm doing my thing. If I use a taxi, the same car that delivered me will serve other people while I'm doing my thing.

Of course it would be even better if I used public transport, but I'm not going to do that because public transport is uncomfortable at best.

> If I drive myself to somewhere in the centre, my car will sit there using up space while I'm doing my thing.

In the absence of terrible laws, it'll be stored somewhere that's more space-efficient (e.g. in a multistory car-park) compared to a taxi cruising around the main streets looking for fares.

Works in America, but not so well in the old cities of Europe.

On the contrary, America tends to waste a lot of city space with surface parking and wide roads, so taxis don't make it appreciably worse, whereas the old cities of Europe are where we really don't have space for them.