Councillors heard the moves were designed to improve safety for drivers and passengers, help with criminal investigations, and could save on insurance costs with feedback broadly welcoming the plans.
It comes as councillors heard the East Riding had aimed to fit CCTV in all 313 licensed vehicles by December 2019 under a voluntary scheme launched in 2016.
But 199 drivers did so, leaving around a third without CCTV equipment, with the scheme paused ahead of Government plans to review rules on it in 2020.
The Licensing Committee backed making CCTV a requirement, with the council agreeing to foot the £160,000 cost of replacing and fitting new systems with audio recording.
Council figures show CCTV footage from taxis has been used 53 times in investigations conducted by County Hall officials and Humberside Police.
A report to the committee stated footage had lead to action being taken in assault cases, both from passengers and drivers.
Footage has also been used in theft and burglary cases and to disprove false accusations made against drivers.
Council figures show footage 18 times for vehicle accidents, 15 for allegations against drivers and six for assaults on drivers.
Footage was used three times for incidents including soiling the inside of cars and 11 for incidents outside vehicles.
Councillors heard the new systems would allow both drivers and passengers to turn audio recording on, with a light also coming on to alert people they are being recorded.
Council officials hope the scheme will encourage more new drivers to come into the taxi trade to help serve the East Riding’s night time economy.
The decision for the council to fund the scheme comes as the taxi trade continues to reel from the effects of coronavirus, with 57 drivers surrendering licenses in two years.
Councillors who backed the plans, including Conservative Cllr Jacob Birch and Liberal Democrat Cllr Viv Padden, said that if drivers had nothing to hide they should have nothing to fear.