Darlington police have been asked to take action after reports of prostitution and drugs use in the town centre.
Taxi drivers have found people taking drugs in public lavatories in the Market Square, and some drivers have been asked to take fares to two brothels in the town.
They have also been subject to violent attacks.
On one occasion, a taxi driver was stabbed with a syringe, narrowly missing a major vein in his back.
Another, parked outside Stanley Racing in the Market Square, had a used syringe thrown into the back of his cab after drug-users left the council-run lavatories.
Drivers have also said that soldiers from Catterick Garrison are travelling to Darlington to use brothels in North Road and off Neasham Road.
Taxi drivers' representative Mick Kennedy said that the incidents had been reported to Darlington police.
He said: "It is giving Darlington a bad name. These brothels should be shut down. We have reported it to the police.
"Taxi drivers frequently see this sort of thing going on. One taxi driver saw a man administering drugs through his arm in the public toilets.
"The police were called, but by the time they arrived it was all over.
"They searched the man and a woman and no drugs were found, because they had already used them.
"People should be made aware of what is going on. One driver had a needle stabbed in the back of his shoulder.
"Luckily, there were no contents in it, but it narrowly missed a major vein. It could have killed him.
"It is becoming a town of ill repute. The authorities need to crack down on it and crack down hard."
A police spokesman said they had received information from the public about the incidents.
He said: " We are always grateful to accept information from whatever quarter, and in this case it has been received and fed into our intelligent system.
"Beat officers covering the Market Square have been alerted to the problem and are keeping a watchful eye on it."
A council spokesman said: "We aware of the complaint and we are monitoring the situation, working with the police, and our community safety team is looking at what appropriate action to take.
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