People shouldn't have to wait as long to get a cab or pay as much for their ride under moves by the NSW pricing regulator to increase the number of taxis on the road.
In its annual draft report, the Independent Pricing and Regulatory Tribunal (IPART) identified the need to offer 280 more licences for operation between 12pm and 5am to facilitate entry into the industry.
It also recommended 205 additional unrestricted taxi licences.
The recommended increase from July next year would allow the industry to meet growth in passenger demand while reducing costs for operators and drivers, IPART chairman Peter Boxall said on Monday.
"(It) strikes a careful balance between positive outcomes for consumers, drivers and taxi operators, and minimising the impacts on existing licence holders," Mr Boxall said in a statement.
Of the extra taxi licences, 140 unrestricted licences were required to meet the forecast 2.5 per cent growth in demand from population, tourism, household and business income and business activity over the 2013/14 year, IPART said.
An additional 250 Peak Availability Licences (PALs) were needed to operate at night to improve services, and reduce costs for operators and drivers.
"Increasing the number of taxis, particularly during under-serviced Friday and Saturday night shifts, will reduce waiting times leading to more taxi trips, higher taxi occupancy and improved hourly earnings for drivers," Mr Boxall said.
He said the draft recommendations would cut waiting times on Friday and Saturday nights by an average of seven per cent, while increasing the number of taxi trips taken in Sydney by about six per cent.