I say no like you do. Unfortunately there are always other drivers who are willing to take them. Don't they realize they aren't gaining anything by taking the extra passengers and are only putting themselves at risk?
They are also depriving another driver from a fare!
It's not that passengers are cheap when they try to squeeze five or six people in a cab, it's that they are traveling in a group and want to remain traveling in a group. Instead of arguing with a large group, maybe drivers can radio another cab to come quickly and pick up the rest of the group. That way, one cab isn't overcrowded and the group doesn't have to split up?