The driver had been parked on Ballantyne Road near The Quilts residential area in Leith when the thugs surrounded his vehicle.
One of the robbers opened the driver’s door and brandished a knife, while his accomplice, who had a screwdriver, got into the passenger seat and started searching the glove box.
The victim forced his way out of the car and rushed to a nearby house to ask for help.
He returned to his car to find his electronic personal data assistant had been stolen from the cradle on the front windscreen.
He was left shaken after the incident, which took place on the side street on Sunday at around 11.30pm.
Police Scotland officers are now hunting the men responsible and have appealed for witnesses.
The first suspect is described as white, aged between 19 and 25 and 5ft 9ins tall with a slim build. He was wearing a dark hooded top with a darker-coloured hood and spoke with a local accent. The second suspect is described as white, in his late teens, 5ft 6ins tall with a slim build. He was wearing a grey hooded top and bottoms.
Detective Constable Chris Harding said: “This was a terrifying experience for the private hire driver and we believe the suspects may have called in the fare with the intention of carrying out this robbery.
“We are keen to speak to anyone who remembers seeing any suspicious activity in or around Ballantyne Road late on Sunday evening or who recognises the description of these men.
“Anyone with any further information relevant to this inquiry should also contact police immediately.”
Tony Kenmuir, director at black cab firm Central Taxis, said the robbery was concerning and urged drivers to take steps to keep themselves safe.
He said: “Generally speaking, we are in a fortunate position that we live in Edinburgh, and incidents like this are rare.
“For the security of the driver and passengers, licensed public-hire black taxis are always best because they are partitioned for both parties. Having said that, it wouldn’t stop somebody grabbing your driver door.
“For the guys in the private hire cars, it’s not a good idea to be parked in a dark side street.”
Mr Kenmuir added: “It’s very sad for anybody to be mugged or assaulted, but these are guys that are out working through the night, trying to provide a public service and earn a living. It’s dreadful.
“I would want to park somewhere that’s well-lit and reasonably public for your own safety. That said, the driver is completely blameless.”
Anyone with information about the incident should call Police Scotland on 101 or phone charity Crimestoppers anonymously on 0800 555 111.