Why is that a problem?

Because we don't have a good enough socialized safety net in the US, or in many other countries, and if you think that most taxi drivers can retrain rapidly to a highly skilled job that isn't in danger of being automated away, you're delusional.

It's a solvable problem, I think, and eventually people will find a niche, but burying your head and pretending that this isn't an issue at all isn't a good idea.

Exactly. This isn't a problem on its own but a symptom of something else that is not right. I'm against implementing protections of the status quo for the sake of masking the symptoms at the expense of progress.