A taximeter penalty device includes a cabin temperature sensor connected to a micro-controller of a taximeter through a time delay. When the cabin temperature of the taxi is within a preset range, the fare is based on a normal rate. When the temperature is outside the range, such as when the cabin is too hot or cold, a lower rate is used. An alternative fare calculation method includes subtracting a penalty from the normal rate. A grace period is provided by the time delay, so that the taxi driver can adjust the temperature to avoid the penalty. The taximeter penalty device thus induces the taxi driver to provide better service.