If a credit card machine is broken (and I don't have cash), do I have to pay the taxi driver? (or in other words, is it legal for me to walk away?)

Depends on local laws. Complex legal situation. In a regulated market, taxis are not supposed to be in service without a functioning credit card machine.

The laws vary widely on this topic, but I will attempt to answer this by provding some examples.  Disclaimer: I am not a legal professonal and this is no way a legal advice.

Let's take a look at these two points that are 

• Generally speaking, as a consumer, you must pay for the service rendered.  By you entering the taxicab, you have agreed to pay for the service that is to be provided to you.  Hence, if you have taken a taxi ride and do not pay the fare, regardless of the reason, it may be illegal for you to walk away.   (Similar is the case when you enter a restaurant.  By entering the establishment and consuming their food, you have agreed to pay for the meal.  Hence, you must compensate for the food prepared.)

• In cities where the taxi rules are regulated, taxis often are required to have functioning credit card machines (e.g. Boston and Chicago).  In these cases, if the taxis do not have functioning credit card machines, they are deemed unfit to provide service to consumers.  They simply should not be in service.  In this scenaro, theoretically, you may not have to pay the fare, at least in the eyes of the city regulators.  What the law says may be different however.

On a side note, taxi drivers often ave a bad reputation for not wanting to accept credit card payments.  This is due primarily to 1) having to pay a fee to the credit card company (and often to the taxi owner) and 2) having there be an official record, which forces them to pay taxes on their income.

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Uber Driver, CEO of TaxiFareFinder and Unleashed, LLC