Mullingar taxi protest drivers (from left) Mr David Shirley, Mr Aidan Walshe, Mr Vincent Morris, Mr Noel Corcoran, and Mattie Egerton. They claim a new fare structure will put many of them out of business Photograph: Matt Kavanagh

Taxi drivers in Mullingar are angry at plans by Westmeath County Council to introduce a new fare structure which they claim will put many of them out of business.

Under the new plan taxi drivers would earn a maximum initial fare of £3.55 for three miles and £1.05 for each additional mile. At present they earn £3 for the first two miles of each journey and £1.25 for every mile thereafter.

Local taxi driver Mr Vincent Morris claims the council's plans would mean a decrease of about 9 per cent in fares for average local runs and a decrease of 16 per cent on charges for longer journeys to rural areas.

Mr Morris is one of 80 taxi drivers in Mullingar, having entered the business two years ago. "I haven't got a fare increase in those two years but the cost of insurance has gone up 27 per cent since deregulation. Yet they are proposing to decrease our income. It's ridiculous."

The chairman of the Mullingar branch of the National Taxi Drivers' Union (NTDU), Mr Mattie Egerton, said the council asked drivers for their views before making the proposals. However their submissions on "workable" price increases appeared not to have been taken into account.

The drivers' protested and the council agreed to meet them last week. Yesterday a spokesman for the local authority, Mr Declan Leonard, confirmed "revised proposals" would be put before the next meeting of the council on October 22nd.

The drivers are still not happy however. Mr Egerton said the problem was that drivers still "had not a clue" what the revised plans were.

In Mullingar, with a population of some 13,000, the majority of taxi drivers are members of NTDU. A report they commissioned from Marketing & Strategic Management, a Dublin-based economic consultancy, on fares in Mullingar said an additional 30 taxis - an increase of 60 per cent - entered the Mullingar market since deregulation in November and that part-time working had become "much more significant".

"In mullingar customer services levels seem to have improved, with waiting times and shared rides both down sharply at weekends. However, with the increase in customer demand nowhere near the 60 per cent increase in supply, the pressures towards part-time working are more severe than in Dublin without a substantial fare increase," the report said.

"Prior to deregulation, the total taxi fare market in mullingar was worth £13 million annually and a taxi driver was earning £26,000 on average per annum. After deregulation, and in the absence of a fare increase, the Mullingar taxi market increased in value to between £15 million and £16.3 million per annum. With the market now being shared between 80 operators, an average taxi driver's earnings fell to between just under £19,000 and just over £20,000 per annum," it said.

It estimates operating costs at up to £14,000 annually (mainly for depreciation, insurance, fuel and interest) and says this means drivers ultimately earn between £5,000 and £8,000 a year, which would need to be increased "by at least 25 per cent to provide a living wage for most of the present taxi drivers".

Taxi driver Mr Aidan Walshe said present fares were already much lower than other provincial towns like Navan (£1.40 for additional miles) and Naas (£1.50 for additional miles) without being decreased further.

The chairman of the transportation and infrastructure strategic policy committee, which is responsible for devising the new fare structure, Cllr Frank McDermott, said it was not his intention to deprive anybody of a living. "That is the last thing I would want to do but a service must be efficiently provided and unless it's customer friendly it's not a service at all."

He said the revised proposals would be tested this week on one taxi and would be discussed with the drivers before being put before the next council meeting for adoption. "We are a rural county and if we give taxi drivers what they want it would crucify the rural community and we do not want that," he added.