Avoiding taxes and higher health care premiums is the real reason some taxi drivers are resisting the mandatory installation of GPS tracking devices and credit card payment systems, according to some sources. The new technology could make it more difficult for some delinquent drivers to hide income from fares and tips that, if reported fully, would put them over the income limit to qualify for state Medicaid.

In two largely ineffective strikes this fall, taxi drivers said the GPS devices and credit card payment systems amounted to an invasion of their privacy, as well as an added nuisance and cost. Many drivers are now complaining that the city’s ability to track their miles, fares, and hours worked would create an explicit money trail in what has long operated as a cash-based profession.

With paper trip sheets, drivers are not required to itemize every fare on their tax returns. The GPS records of fares, however, could be obtained from the Taxi & Limousine Commission and used in an audit, a spokesman for the city’s Department of Finance said.

“Nobody wants to pay taxes,” a taxi driver, Coicou Emmanuel, said. “Some drivers never tell all of what they’re making — a lot of people lie. The GPS will tell everything you’re making.”

Mr. Emmanuel, a Haitian immigrant who has been driving a taxi for 22 years, said many drivers are worried that after installing the tracking devices and credit card machines, they could have to report earnings of up to $5,000 more this year than last year. The full effects of the new technologies on taxes would not be clear until next spring, he said.

Because they are considered freelance workers, taxi drivers also cover their own health insurance, and many depend on Medicaid or state-sponsored health insurance.

The average taxi driver makes between $25,000 and $30,000 a year driving five days a week, a spokesman for the Taxi Workers Alliance estimated. Reporting higher salaries could push some drivers to levels where they would no longer be able to qualify for state health insurance plans. To qualify for Medicaid in New York, a four-person family can have a monthly net income of $1,109, and resources of up to $6,650 a month.

All city cabs are required to install the new technology package, which includes passenger television screens, credit card payment options, and the GPS device, by February. The requirements have drawn fire from taxi drivers, who say the “enhancements” are financial losers and infringements on their privacy rights. City officials have defended the package, which they say was designed to improve customer service. City officials said the GPS would never be used to monitor the movements of an off-duty taxi.

“The TLC will know what we make,” a spokesman for the Taxi Workers Alliance who has been driving a taxi for 30 years, William Lindauer, said. “It will give them more information about incomes for drivers, and leverage for negotiating a future fare hike.”

Some leaders in the taxi industry said they were surprised to hear that drivers were hiding income on their tax returns.

“It’s possible that some guys want to hide their income, but all the guys I speak to pay taxes,” the managing director of the League of Mutual Taxi Owners, Vincent Sapone, said. “Maybe the drivers who come to the city for two or three months at a time to drive and then leave don’t pay, but the guys who drive for 15 years — they all pay their taxes.”

“I can’t imagine that all of a sudden cab drivers are going to be a target of the IRS,” Council Member David Weprin, who is chairman of the council’s Finance Committee, said. “It’s the same thing as waiters and waitresses, or anyone in the cash business.”