Mukta Mia, 46, of Torquay, drove the 19-year-old woman down a dark country lane in Devon in January where he assaulted her.
Mia, who admitted sexual assault at Exeter Crown Court, was also put on the sex offenders' register for ten years.
The court heard the teenager feared she would be "raped and killed".
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Prosecutor Janice Eagles said the teenager, who cannot be named for legal reasons, was picked up by Mia from a night out with friends in the early hours of the morning.
He turned off the main road after the teenager started crying when he said "he would not let her go" if he was her age, the court heard.
The woman cried "no" as Mia kissed her and touched her breast without her consent, Miss Eagles said.
The assault ended after she turned down his request for sex, and he drove her to a town centre near her home where she paid Â£10 of the original Â£30 taxi fare.
Judge Graham Cottle said the assault was "every girl's nightmare".
He said not giving Mia an immediate jail term would "send out the wrong message to the public and I won't do that."
Martin Salloway, defending, said Mia's wife had died two years ago and he was bringing up his two teenage children.
"He misread the signals. He deserves what he gets and his life is in ruins," Mr Salloway said.
A taxi driver who sexually assaulted a teenage passenger in his car has been jailed for 15 months.