Clarification: Many discussions about Loja, Ecuador on English-speaking internet sites and books will tell you that it only costs $1 to take a taxi anywhere in the city of Loja. This is just not true and is causing animosity among Ecuadorians toward North Americans because the foreigners frequently refuse to pay the actual fare and/or argue with the driver. Loja is actually a very spread-out city, so the fares can be several dollars depending on how far you go.
It is true that fares are low if you're just staying in the downtown area (which is only about 10 blocks by 5 blocks wide) but this is a very small part of the whole city. According to friends who take taxis often, the absolute minimum fare is now $1.25.
Fortunately for all of us, taxis in Loja now have meters. Ask the driver to start the meter when you get in if he or she doesn't automatically do so. This way, when you get to your destination it is obvious what you need to pay, no arguing required! (However, if the meter shows less than the minimum, you'll need to pay that minimum required amount.)
To give you a little bit more of a frame of reference, the fare from the big public university on the south end of the city to a neighborhood on the north end (without going into any of the mountain neighborhoods, i.e. a straight shot more or less along a river) costs about $4 (about a 25 minute ride, depending on traffic). Since most of the land that is part of the city goes up and down the mountains, to go from a mountain neighborhood on the east side to another on the west side, especially if one is north and the other south, could cost about $7 in a taxi. (A tourist would have no need to do this, but a parent living in Loja and taking a child to a friend's house may need to.)
Loja still has lower taxi fares than the bigger cities in Ecuador, so if you can accept the fact that you'll pay more than a dollar, everybody should be happy.
