Horsham Taxi Service owner Max Hood said people could expect to pay 12.5 per cent more from May 19.

“The Essential Services Commission has not given us a fare increase for five years,” he said.

Last month, the commission released a taxi fares review. 

It recommended taxi fares be raised by 12.5 per cent.

The Victorian Taxi Services Commission has implemented the recommendation.

“For the average Horsham customer, that’s going to add about a dollar to their fare,” Mr Hood said.

He believed the fare increase was fair.

“It’s simply a catch-up of a consumer price index rise of 2.5 per cent a year for the past five years,” he said.

“When we took over the business in February 2009, gas was about 53 cents.

“Today, we’re paying about 90 cents.”

But he said the 12.5 per cent hike was not the only change in the works.

From July 1, Mr Hood said taxi operators would have to split taxi fares 45:55 with taxi drivers, with drivers receiving the majority of the share.

“That pretty much cancels out the fare increase to us as operators, which means unless the State Government reverses its decision the fares will have to go up again after July 1,” he said.

The new arrangement would cut taxi operators’ incomes by 10 per cent.

“It is a huge impost to us and unfortunately it’s our clients who will have to cough up that extra money,” Mr Hood said.

“We just can’t absorb all costs.”

He said he did not support the new fares split.

At present, fares are evenly split between taxi operators and drivers.

“Our drivers are happy with the 50:50 split with just a fee increase,” Mr Hood said.

He was also concerned for vulnerable Wimmera taxi users who would have to foot the bill.

“We feel sorry for the clients who battle with their pensions,” he said.

He said many of the service’s daytime customers were elderly pensioners.