The crash into the Red Chilli Sichuan Restaurant in Northbridge left four people injured early on Sunday morning.
Police said four people got into the taxi outside Paramount Nightclub on James Street about 3.30am.
When the cab started moving, a passenger began attacking the driver and damaging his car.
The 24-year-old lost control of the vehicle and smashed into the restaurant just metres down the road.
“Last night a car hit our restaurant,” the restaurant’s manager, who didn’t give her name, said.
” … so far this morning I see this accident. It’s really surprised me.”
It’s understood one person was ejected from the car.
Another two, a man and a woman, were trapped but emergency crews managed to free them in less than an hour.
The taxi driver suffered serious facial injuries, including multiple fractures.
His employer, 13cabs, is urging the public to recognise the dangers drivers face, telling 9News it was saddened and shocked to hear of the assault.
The restaurant was closed at the time but was still left counting the cost.
“After COVID it’s running a business really hard,” the manager said.
“I hope you can help us to figure what happened here. Any support you can help me that’s really appreciated.”
Police are investigating but no one has been charged.