MOSCOW – Day and night, the streets of Moscow are clogged with drivers in beat-up Ladas cruising for fares. Schoolteachers, doctors, pensioners – they take to the streets in their spare time looking to supplement their meager incomes. Those in need of a ride simply walk to the curb and stick out their arms. Within minutes, the cars will be lined up, their drivers ready to negotiate a fare. About $3 is usually enough for a ride anywhere downtown, and $8 will get you clear across the city.

Muscovites tell stories of flagging down not only private cars, but also ambulances, fire trucks, snowplows, and even trolleybuses.

“It’s a good system, everybody wins,” said retired police officer Sergei, who declined to provide his last name, and earns more in a few nights ferrying passengers around the city than in his entire month’s pension of about $120. “People don’t want to pay what the yellow taxis charge, and there are not enough of them anyway. And this way people like me can earn enough to get by.”

But after years of tolerating so-called gypsy cabs, the city of Moscow seems to have had enough. Claiming that there are about 40,000 unofficial taxi cabs operating in Moscow and that the taxi black market is worth as much as $1 billion, officials have drafted a law that would end the free-for-all. It would require cab drivers to be licensed by the city, use taximeters, and have their vehicles regularly inspected.

“This is a huge industry and the city needs to regulate it,” said the spokeswoman for Moscow’s Transportation and Communications Department, Maria Protsenko. “With the situation we have right now, drivers are not paying taxes and there’s no guarantee of the safety of passengers. … When you get into an unlicensed taxi, you never know who you’re sitting beside, what kind of diseases he might have, whether or not he was just released from prison the day before.”

Ms. Protsenko said there are currently only about 4,000 licensed cab drivers working in Moscow – a tiny amount for a city of more than 12 million.

The city hopes to have the new regulations in place by this summer, but enforcing them could prove dangerous. Organized crime families are heavily involved in the gypsy cab business and the mob-style killing a few weeks ago of the head of a local cab company appears to have been a warning to back off.

Gypsy cabbies are divided into two types: shakily, or jackals, who cruise the streets looking for fares, and bombily, or bombers, who work in pickup spots like airports, train stations, and hotels. Criminal organizations control the bombily, giving them permission to work at certain locations, and taking a cut of their fares.

“We are told where and when we can work and how much we can charge. You have to follow the rules, or else,” said Dmitri, a bombily who works at Moscow’s Domodedovo Airport.

The city has tried to end their stranglehold by promoting licensed companies and even owns 19% in one, MosCab. The company offers rides to and from Moscow’s main airport, Sheremetyevo, for less than $25 each away. Black market taxis operating at the airport usually charge twice as much and can often get $100 from an unsuspecting foreigner.

On January 11, the head of MosCab, 30-year-old Felix Naiman, was gunned down outside his apartment building in southern Moscow. He was shot three times, in the head and chest. MosCab’s deputy director, Roman Slaschov, said police are investigating links between the killing and the black market taxi business.

“One can’t say for certain why he was killed, his murderers didn’t leave a note behind,” Mr. Slaschov said. “But obviously one of the theories is that it had to do with our work.”

Licensed cab drivers have also come under attack when they’ve tried to encroach on protected turf. A week before Naiman’s death, 15 people were arrested and eight injured after a brawl broke out between licensed and unlicensed drivers at a city square near three major train stations. Last summer, licensed drivers complained repeatedly of being attacked when trying to pick up fares at the Kursky train station. Two major brawls broke out, including one in July involving more than 100 people.

Among those attacked were drivers from New Yellow Taxi, the city’s biggest licensed cab operator with 1,800 cars.

New Yellow Taxi’s sales manager, Vadim Goppa, said the company’s drivers face frequent intimidation.

“Almost every driver in our company has been intimidated. The driver will be trying to pick someone up and he’ll be approached by a group of men and told he can’t wait there, that this particular spot belongs to them,” Mr. Goppa said.

“Of course we think the city’s plans to regulate the market are a positive thing. With gypsy taxies, what we have is people not paying taxes, criminal protection rackets, and murders.”

Ms. Protsenko said the city knows the dangers involved in tackling unlicensed cabs, but isn’t about to back down.

“Sure, the criminal elements are not going to like it, and we know the examples from the past of fights and shootings, but that doesn’t mean we shouldn’t try to regulate the market. We can’t be afraid of this.”

Still, experts doubt Moscow’s fleet of gypsy cabs will be disappearing any time soon.

A Brooklyn-based transportation consultant, Bruce Schaller, who visited Moscow in 2002 to advise New Yellow Taxi, said it took more than a decade for New York City to stamp out gypsy cabs in the 1980s and 1990s.

“The situation in Moscow reminded me of New York going back 25 years, when there was a thriving gypsy cab industry, especially in the outer boroughs,” he said.

The key to New York’s success, he said, was having a largely incorruptible police force. Moscow, with its notoriously bribe-hungry police, may find the task next to impossible.

“Getting rid of this kind of thing takes a number of years of intensive enforcement,” he said. “It was a long and difficult process in New York and I don’t see how it could be any faster in Moscow.”

Most Muscovites would see that as good news. They’ve taken gypsy cabs for granted since the Soviet era, when only the Communist elite could afford to take official taxis with their black and yellow checkerboard stripes. Ask them about banning gypsy cabs and many will respond with an old joke about a guy trying to hail a cab on his first visit to Moscow. The guy is shocked when a regular car pulls over and says “But I was hailing a cab. Where are your black and yellow stripes?” The driver replies: “Do you want stripes or do you want to get where you’re going?”