The drivers have been on strike since last week to demand tighter regulations for app-based ride-hailing services like Uber.
Dozens of riot police wearing crash helmets and carrying shields descended on the central Paseo de la Castellana and with the aid of the cranes removed taxis which were blocking the key boulevard which runs north-south through the Spanish capital.
Despite the tension between the taxi drivers and police, there was no violence.
After the first vehicles were removed, drivers at the head of the column of taxis slowly started to drive away while honking their horns, according to an AFP reporter at the scene.
Like their counterparts in many other European countries, Spain’s taxi drivers say that ride-hailing apps like Uber, or its main Spanish rival Cabify, have made it impossible to compete.
Madrid taxi drivers began an open-ended strike on January 21 and had threatened to block traffic in the Spanish capital on Monday with the help of others who have joined them from cities across Spain.
“The legitimate right to strike does not include the right to paralyse the city,” the central government’s representative in the Madrid region, Jose Manuel Rodriguez Uribes, wrote on Twitter.
Barcelona taxi drivers on Thursday called off a six-day strike on Thursday after the regional government of Catalonia unveiled new regulations which makes it possible for cities in the region to require customers of ride-hailing services to book a ride at least an hour in advance.