> Couldn't that be entirely (and easily) avoided by simply handing them cash and asking for a specific amount back? Ie. fare is $10 and you want to give a $2 tip, you hand them a $20 and ask for $8 back. Is there a benefit to not asking for a specific amount back that I'm missing?

I've actually never seen anyone pay for a cab any other way but asking for an amount of change back (well, besides just giving them the amount you want to give them and getting out of the cab).