It happened around 3:45 Friday at 3rd and Callowhill streets in Spring Garden near the Vine Street Expressway.
Witnesses tell Action News that the horse was travelling along 3rd Street when it got spooked and began to run off.
"I saw the horse carriage was coming down and something was wrong with its hoof and it spazed out," said David Williword, witness.
As the animal approached Callowhill Street, it ran a red light and went into the intersection where it was hit by a car.
"It jerked and traffic was coming - it ran into the car then it tilted over," said Williford.
The impact of the crash ejected the 21-year-old female carriage driver. She reportedly hit her head on the pavement and was rushed to Hahnemann Hospital in guarded condition.
The driver and passenger inside the car say it all happened so fast that they were unable to stop.
"My car was driving that way and it was a green light. The horse was right there and it was too close," said Ming Gao.
The horse only appeared to have suffered a leg injury.
An investigation into the crash continues.