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Cab drivers don't get base pay. They have to pay to rent the cab and then just keep the fares.

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So why should I tip them then?

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I guess because it encourages good service in the future? But since you rarely get the same cab you are kinda relying on others to continue the selection process.

Also, I know the margin for a lot of cabbies has gone way down with gas prices going up so much etc. So in the absence of a fare hike it may be a way for you to ensure that the service is available in the future.