Emergency services attended the scene, in Hopwood, at around 8.50pm on Wednesday.
Mr Arshad was taken to Selly Oak Hospital in Birmingham, but died from his injuries yesterday morning.
The dead man's partner Shahida Hussain, 34, is seven months pregnant with their fourth child.
She said in a statement: 'He was a loving husband who adored his wife and children and had a very close relationship with his sons, aged eight, six and three years old.
'He was a man with a big heart who was always there for others.
'Both his family, community and colleagues have suffered a major loss. For those close to him the brutal nature of his murder is impossible to comprehend.'
It is believed he had picked up his last fare fare in the Kings Norton area of the city.
Detective Superintendent Sheila Thornes, of West Mercia Police, said: 'There has been a lot of speculation about how this man came by his death and possible motives.
'At this early stage we are keeping an open mind and are looking at all lines of enquiry.'
Ifran Ahmed, chairman of the Birmingham and Solihull Taxi Association, told the Birmingham Mail newspaper: 'We are all shocked and appalled by this complete waste of life.
'Our members drive black cabs, but some of them knew him. I did not know him personally, but some of my colleagues did and nobody has a bad word to say against him.
'He was a very good guy. He was a hard-working family man, with a young wife and a young family.
'Every single day and night drivers in black cabs and private hire vehicles put themselves in danger and it’s getting worse. If we defend ourselves we get into trouble and if we complain to the police they do not react to our complaints.'
A major incident room has been set up at Redditch police station and house-to-house enquiries are ongoing. A racist motive has not been ruled out.
A post mortem examination was being carried out today and family liaison officers are supporting the victim's relatives, police said.
Anyone with information should call West Mercia Police on 0300 333 3000 or Crimestoppers on 0800 555 111.
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24/07/2009 01:12 PM
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Father-of-three taxi driver beaten to death with a hammer
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Last updated at 11:37 AM on 24th July 2009
A taxi driver has died after he was dragged from his car, beaten with a hammer and left lying at the roadside.
Father-of-three Mohammed Arshad, 36, was found badly injured at the side of a country lane in Birmingham. He is believed to have been attacked after a row.
His blue Ford Galaxy people carrier was later found abandoned a mile away.
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