Manhattan has the same problem, especially considering how narrow the streets are (due to "free" parking) and the lack of crosstown subway lines. It looks like the MTA has started a new program where some busses have police-car-like flashing lights and dedicated lanes. I haven't had the occasion to use the bus yet, but it doesn't look like it does anything. Taxi drivers make it their goal to use the road as rudely as possible, and there are a lot of taxis in Manhattan.
The new express busses are faster, but not by enough. Getting crosstown is still a hassle. I walk from 2nd Ave to 7th Ave every day for work, and find that it's generally nearly as fast to make it a brisk walk -- healthier and cheaper, too.
That said, taxis aren't the problem. At least they're always on the move and always picking up passengers. The parking lanes on the major streets should absolutely be turned into dedicated bus lanes -- but it's not taxis that are using that parking.
