The offender was arrested but the only reparation Mr Melrose received was the $44 fare.
He has also had bottles thrown at him and said verbal abuse against drivers was common.
"You have to have a very thick skin."
But Mr Melrose said since taxi cameras were made compulsory last month people fooled around less.
"If I feel like someone is going to cause trouble I say to them, 'Isn't it great we have cameras now so we can catch people?"'
The Government made security cameras in taxis compulsory on August 1, following the stabbing of two taxi drivers earlier this year.
Despite this, Dave Mayhew who has been a taxi driver for 43 years, said he had "lost his nerve" after so many bad experiences and wouldn't work at night anymore.
"I've seen it all.
"I've had a knife held to my throat, a gun pointed at me, I've been strangled once and I've been punched in the face many times.
"I'm too old for that behaviour now."
The 75-year-old said he wasn't convinced about the cameras and thought some people would still assault drivers.
Mr Mayhew said he still loved his job as long as he didn't have to work at night.
Rotorua police Senior Sergeant Ewan Dunsmuir said there wasn't a lot of taxi crime before the cameras and since they were introduced he hadn't heard of any.
But Mr Melrose, who has called the police five times in the past 12 years, said a lot of the time drivers didn't report incidents because they didn't want to spend hours in the station "for nothing".
Mr Dunsmuir said the best way to stay safe was to do an initial risk assessment and refuse the passenger if they felt it was dangerous.
"We fully support the taxis in Rotorua to make the judgement if they feel it's necessary.
"They [taxi drivers] have the right to refuse someone."
However, Mr Melrose said it was often hard to tell who to refuse.
"You can't tell a book by its cover.
"You might get the roughest looking person who causes no problems and then a well-to-do looking person will cause problems or refuse to pay."
The cameras cost $1000 each but Mr Melrose said it was worth it for the security it provided.
He said he didn't think the cameras would stop crime in taxis altogether but he was definitely noticing a difference.
New Zealand Taxi Federation executive director Tim Reddish said there had been a significant decrease in the number of drivers being abused since the cameras were introduced.
"There's the odd nutter out there who won't take any notice of the cameras but in general they're a pretty powerful deterrent. And if a nutter does succeed then we have the evidence to do something about it."