TAXI fares are set to rise in Peterborough for the first time in five years as firms battle with the double whammy of rising fuel costs and the credit crunch.
The price of riding in a Hackney carriage on a metered journey is set to go up from £3 to £3.30 for the first mile or part of a mile. Additional miles will be hiked from £1.50 to £1.70.

Mahmood Khan, who runs Station Taxis, said drivers had been forced to ask Peterborough City Council to approve the increases as they are struggling with diesel costs of £1.30 a gallon and a fall in customers.

He said: "The main reason is the price of diesel. The council's approach was, 'It's up to you,' and with 200 Hackney carriages in the town competing for work, it's hard at the moment, so we need a bit extra.

"In Peterborough, the council says you have to have a proper cab and not just a saloon car, and that costs you £35,000 and will only give you 22mpg if it's an automatic, or 25mpg if it's a manual. Then, for a 6,000-mile service, it's £300. On top of that, you have your insurance and your licence and badge fees.

"And because of the credit crunch, people are not travelling. You can end up doing one £3 job in an hour sometimes."

The fare rises – the first since May 2003 – will be accompanied by a cut in the cost of travelling at Christmas and the New Year.

Currently, passengers pay £5 for the first mile or part thereof and £2 for each additional mile from 6pm on Christmas Eve to 6am on December 27, and between 6pm on New Year's Eve and 6am on January 2.

Under the new arrangements, customers will instead pay £4 for the first mile and £2 for each subsequent mile.

It will, though, cost more to ask a driver to wait for you – £12 rather than £8 an hour.

Proprietor of Betta Cars Mohammed Shabir agreed it was necessary for the taxi trade to ask for the increases.

But he said it would have been better for them to have come in over a longer period, rather than to have hit customers with a big hike after a long price freeze.

He said: "I don't have any argument with the increases, but we are going about it the wrong way. It's a big jump after five years."

The city council's principal taxi enforcement officer Ken Gray said: "On the scale of fares listed by 378 local authorities, Peterborough City Council is currently listed at 239.

"We are also one of only a few local authorities across the country which charges the same for taxi travel whether it is day or night."

The council is now consulting on the proposed fares, which could take effect on July 21 if no objections are received.

Charges for private hire minicabs are not affected by the changes.

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