A taxi fare increase is under "serious consideration" according to the Premier, who said talks with leaders at the Bermuda Taxi Association (BTA) have reached "a mature stage".

Ewart Brown, who is also Minister for Tourism, said: "I salute the hard work being done by the BTA and hope this trend of mutual cooperation will continue in an effort to produce the kinds of results both sides desire and Bermuda needs."

The mooted rise would be the first since 2004, when fares went up by 20 percent. The prospect of another was welcomed by Michael Ray, president of the Island's largest cab company, BTA Dispatching.

"I would be one happy happy camper to hear that — when it becomes a reality. It's something we've been asking for," he said. "The operational cost on a yearly basis is extremely high and because we are regulated (by Government) we can't increase our fares.

"Even though this has been a pretty decent summer with air arrivals and cruise ship passengers, it's still very expensive to operate cabs."

Bermuda's 600-strong taxi fleet charges a basic rate of $5.75 per mile for the first mile and $2 for each additional mile.

This increases between midnight and 6 a.m., on Sundays and holidays, and when there are more than four passengers. Mr. Ray said he believed customers would be accommodating of an increase, pointing out that the Island charges less per mile than many North American "gateway" cities for tourism, where fares have been on the up.

Taxi drivers famously ferried voters to polling stations ahead of the Progressive Labour Party's historic election win in 1998. However, Dr. Brown has experienced a strained relationship with them, coming under heavy fire for introducing mandatory Global Positioning Systems (GPS), which have proved unpopular with some drivers.

Mr. Ray said of the olive branch extended last night: "Certainly this information should heal some of the areas that need to be healed."

A cautious note was sounded by Gilbert Trott, President of the Bermuda Taxi Association, who said: "We've had a very positive and constructive dialogue. Other than to say that serious consideration' is really not quite positive enough at this point in time, we don't have any comment.

We'll be more inclined to comment when it's definitive." Another taxi driver — who asked that his name not be printed — scorned the news as "too little too late".

The cabbie complained about legislation passed last year allowing minibus drivers to compete directly with taxis for a slice of the tourism industry.

"I say this Government is really putting taxis out of business. We're getting minibuses and limousines and this season has been a terrible season.

"Last week they called 40 taxis to the airport but the minibuses came and took all the people," he claimed.

Opposition Leader Michael Dunkley said: "This is long overdue. When someone makes a promise it should be delivered in a timely fashion."

He pledged that a United Bermuda Party government would consider measures including a fare increase and fuel rebate for drivers.

In his statement, Dr. Brown claimed the taxi industry is being buoyed by encouraging trends backed by statistics — such as the Transport Control Department reporting a recent spike in the number of new taxi owners between the age of 21 and 50.

"For the first time in a long time we are witnessing a positive development in the taxi industry. Younger owners, who are computer savvy, are buying taxis and putting them on the road for hire as often as they can.

"This will automatically lead to greater availability and that's what we've been looking for — improved levels of service for visitors and residents alike," he said.

"If this trend continues Government will be in a better position to justify a fare increase and encourage fuel discounts.

"However, in awarding any such fare increase we must strike a balance between the very real needs of the industry and the service expectations of the travelling public. The Transport Ministry's team has been working with the Ministry of Finance and other stakeholders on this very critical point."