The unnamed man was driving a Ford Mondeo when the crash occurred at about 01:00 GMT on Manchester Road in Burnley. He died at the scene.
The 48-year-old taxi driver suffered serious chest and leg injuries and was taken to hospital.
His two female passengers, aged 58 and 38, also received head injuries. A third car, which was parked and unattended, was also damaged.
Lancashire Police said an investigation was under way and appealed for witnesses.
A 19-year-old driver has died after a collision with a taxi.