Sydney taxi fares could be cut because many people find them too expensive, the pricing regulator says.
The recommended 2.5 per cent fare drop is one of four options suggested by the Independent Pricing and Regulatory Tribunal (IPART) in an issues paper released on Monday.
"Our recent survey of Sydney residents on taxi use found that almost half of people surveyed had not used taxis in the last six months," IPART said in the paper.
"Around two thirds of people who had considered taking a taxi but in the end did not do so said the reason why was because taxis are too expensive."
The other options include no change to fare levels, an increase in line with the Consumer Price Index rise of about 2.5 per cent, and a change of fares in line with the Taxi Cost Index.
The pricing body is seeking submissions on its issues paper, with any fare changes to take effect from July.