He said that he needed the $55 fare in cash because he needs to take some money home and it is midnight. I told him that I didn't feel comfortable, he was apologetic, explained he needed the money and so, to save trouble, I went into the hotel and got out the cash for him because I just got off a few hours plane ride, I didn't want to deal with this nonsense at this time of night.
I told the man behind the desk at the hotel and he explained that it happens all of the time. He said a lot of the drivers pocket the cash for themselves which is why they demand cash. He then advised us not to hire taxis and to use a hotel recommended private driver service that is the same cost (no doubt a nice referral fee for them). An ulterior motive there, but I don't doubt that this happens all of the time.
This experience, other experiences from colleagues and friends as well as online paints a picture of a pretty broken and corrupt taxi system in Los Angeles especially. While I am not a big fan of Uber (ethically) I do like the idea of ridesharing and the rating system. If Lyft, Uber and other companies were operating here, perhaps things would be different.