The authority revoked the licences of drivers Daljit Singh Sangha and Gulam Abbas following an altercation between the two which took place in front of a passenger.
Both lodged an appeal, which were heard separately at Wolverhampton Magistrates Court, but failed to get the decision overturned.
Licensing chiefs today welcomed the verdict and said it sent a clear message to all drivers that inappropriate behaviour is not acceptable.
The incident took place in November last year at the Hackney Carriage rank near Wolverhampton railway station.
An argument broke out between Sangha and Abbas which escalated when a passenger attempted to enter one of the vehicles. The drivers both used abusive language and made threats whilst in the presence of the passenger.
Both drivers subsequently received cautions from British Transport Police.
Wolverhampton City Council's licensing service carried out a review and both of the drivers' licences were revoked.
Sangha, aged 53, of Wednesfield, appealed against the revocation of his Hackney Carriage licence and the refusal to renew the licence. The case was heard at Wolverhampton Magistrates Court on Wednesday (27 August) and the appeal was dismissed.
At an earlier hearing on 24 July, Abbas, aged 47, of Merridale, appealed against the revocation of his Hackney Carriage and private hire licences, as well as the refusal to renew both of them. Again, Wolverhampton Magistrates Court dismissed the appeal.
Councillor John Reynolds, Wolverhampton City Council's Cabinet Member for City Services, said: "We are very pleased that the courts recognised the seriousness of this.
"We adopted a 'zero tolerance' approach towards such breaches and this is the first time it has been tested in court.
"What exacerbated this situation is both drivers engaged in such behaviour in front of the public and this sends out a clear message that it will not be tolerated."
- released: Monday 1 September, 2014