Taxi owners warn proposed insurance hike could mean higher fares

Newfoundland and Labrador's taxi industry is fighting a proposed 50 per cent increase in the amount it is charged for insurance coverage.

If the increase is approved by the Public Utilities Board, it could be passed on in the form of higher rates for customers.

It could also shut some companies down, said Doug McCarthy, general manager of Co-op Taxi in St. John's.

McCarthy said the proposed hike would come on top of a 50 per cent increase approved last year.

"I already know of one instance where because of the increase last year, one company has already gone out of business," said McCarthy.

He described the current insurance rates as "outlandish," explaining that it already costs $6,000 to insure a first-time driver for relatively new car.

"If the rate increase that they are looking for goes through, you can add another $3,000 to that," he said. 

The taxi industry and its lawyers are preparing to argue against the proposed increase at a PUB hearing in early November.