Well, not that long ago, hardware was hundreds of pounds and GPRS cost an arm and a leg. This is not the case anymore. The market is flooded now with good quality hardware under £100 and GPRS is practically free. The real problem lies in the business models that companies use and as always the lack of real competition, (I won't go as far to say price fixing!).
As an example, most still tie you to their own hardware. I often get quoted £200-£250 for hardware when we all know that the market is flooded with similar devices for between £50 and £100. Then a charge for GPRS when I see that a Lebara sim card in the UK will provide 1Mbyte of data free each day. Enough I think for most applications. Then the real problem, the cost of tracking site access and so called "mainenance". £15-£20/month is not uncommon. That is a licence to print money to store a few megabytes of data on their server and run some simple software that plots position on a map and calculates some simple metadata from strings received. Sure many need to pay for the Google Maps agreement but why use Google Maps when wiki maps such as OSM are better.
It is time for a new approach to this business. Here is a good possible solution to start the ball rolling. Use companies like
http://www.gps-server.net that are hardware independent and sim card independent. They will charge you around £1/car/month for software use. Start using cheaper reliable hardware and a free Lebara sim card.
So with old model I pay £200 hardware and £20/month so I pay £70,000 to track 50 cars over five years
With new model I pay £90 hardware and £1/month so I pay £3000 to track 50 cars over five years.
All we need is a software company to produce a more taxi based tracking application on the same model.