Across the Paris region, more than 3,000 taxis went on strike, according to police figures, and hundreds converged around midday on Porte Maillot, near the La Defense business district on the capital's western rim.
Later in the day, a leader of a national taxi drivers' union declared the dispute over after meeting with an adviser to Prime Minister Francois Fillon.
"The conflict between the 55,000 taxis in France and the government is finished," said Alain Estival, adding that the government had agreed not to take up proposals opposed by drivers.
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Think of my dish towel as my white flag of surrender.
How do you deal with things when you have reached a domestic stalemate?