The Hout Bay Taxi Association claimed it has had a deal with the City of Cape Town since October that their vehicles will not be impounded.
The association said that the city had taken responsibility for the delay in issuing operating permits.
Members of the association protested, shutting Hout Bay’s major routes on Thursday.
They demanded that their impounded vehicles be returned immediately.
The Hout Bay Taxi Association’s Samkelo Krweqe said he believes they were targeted because they are black.