New York City police said the 58-year-old driver was having a medical episode at the time.
A statement from Australia's Department of Foreign Affairs (DFAT) confirmed two citizens had been injured in the incident and were receiving consular assistance.
Owing to privacy obligations DFAT was unable to provide further comment, the statement said.
The accident happened outside Macy's flagship store in Manhattan. (AP PHOTO)
An NYPD spokesperson would not elaborate on the type of type of medical episode the driver experienced but said no criminality was suspected at this stage.
The driver was taken to a hospital in stable condition for further evaluation.
Also hospitalised after the taxi drove onto the footpath across the street from Macy's flagship store in Herald Square were a nine-year-old boy with a laceration to his right thigh, a 49-year-old woman with a leg injury and a 41-year-old woman. All were in stable condition, police said.
Three other pedestrians, women aged 19, 37 and 49, declined medical treatment.
Herald Square is a major shopping destination for tourists and locals, with the Macy's store taking up an entire city block between 34th and 35th streets. It is among the city's many retailers that feature elaborate Christmas window displays.
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