On this question there are a lot of opinions out there varying from "don't worry, be happy" to "never never NEVER hail a cab on the streets of Lima".

The truth is that hailing a street cab in Lima involves some degree of risk, because Lima street cabs are almost entirely unregulated. The routine is that you flag the cab and negotiate a fare before you get in, and of course you pay only on arrival to your destination. And you don't tip (but see comment below). If you are carrying bills larger than S/.20 you should confirm that the driver can make change before you board the cab.

The following factors increase the risk that you may be robbed en route:

1) You don't speak Spanish.
2) You don't know the most efficient route(s) to your destination, or worse yet, you have no sense of direction in Lima.
3) You have no idea what a reasonable fare is to your destination.
4) You look like a gringo (fair hair and skin).
5) You are wearing an expensive watch or jewellery.
6) You have a lot of luggage.
7) You are coming from, or going to, the airport or other destination in an unsafe part of the city.

One way of reducing your risk is to look for cabs where the driver is caged inside the vehicle. They do this to protect themselves from assault. Caged drivers are unlikely to be in cahoots with anyone interested in robbing you; they're just trying to make enough money to feed their family. Which is nearly mission impossible on most days, so these guys I often tip.