This is known as the taxi-bug, it happens when installing custom cars. The traffic will be full of taxi's, police cars and sometimes the car you're driving.
There are some taxibug fixes out there that claim to solve the problem but in my experience they only fix the problem partially, the amount of taxis is reduced but there'll still be more taxis then usual. I'd suggest first trying to set traffic density to 20 (or lower) before trying out any taxibug fixes.
If that doesn't do anything just google taxibug fix gta 4 and you'll find several, like trafficcontrolsystem or trafficload. Don't use more then 1 at a time, some of those fixes do some damage to performance so it's best to try 1 at a time.