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for whatever reason that rule was originally enactedMost likely the law is simple protectionism for unionized bus drivers, to stop private jitneys from putting them out of business. The use case is: you commute every day from point A to B, so you go along El Camino following the bus route, picking up people FROM BUS STOPS to share your ride and charging them what the bus would have charged. This is great news for the bus riders - they don't have to wait for the next bus so they get to their destination quicker - but if it catches on the bus lines ride empty, lose more money, and eventually political support for the bus route goes away.
> Perhaps to prevent cabbies from charging pairs of passengers $4 each when a single passenger would be charged $5.
Nah, that's not it. Normal cabbies (that use a taxi meter) have no flexibility over rates - the whole point of the meter is to make sure they're paying the right amount of taxes and kickbacks; accepting any extra regular fare (other than tips) would be illegal.