Cab fares will increase by 8c a kilometre from Monday, December 4.

It will cost $1.76 a kilometre to travel by taxi in Townsville – an increase of almost 4 per cent.

But Townsville Taxis general manager John Lobwein said he expected twin cities residents would accept the rise.

He said the small increase should be seen as a pay rise for the hard-working drivers.

"It is a pretty minimal increase. We are seeing this more as a pay rise for the drivers than anything else," Mr Lobwein said.

He said Townsville residents could expect to fork out an extra 40c for an average 5km trip.

Townsville taxi fares will increase by 3.9 per cent, in line with a statewide rise.

But Townsville party-goers will be hit twice as hard as their southern counterparts.

A $2 levy for taxis hailed between midnight and 5am will be introduced only in Townsville, Cairns, the Gold Coast and Sunshine Coast.

Mr Lobwein said the late-night levy had been introduced in Brisbane 12 months ago with no complaints.

He said the levy would cover the cost of a taxi marshall and security guard at the Flinders St East rank.

'Really people just want to get home safely, I don't think they will mind," Mr Lobwein said.

Taxi fares were last increased just four months ago, to cover the escalating cost of fuel.

But Mr Lobwein said drivers had been forking out extra for fuel months before that increase came into effect.

He said the latest small increase would line the drivers' pockets.

"It's to keep it ticking along in line with inflation," Mr Lobwein said.

"This one is for the drivers, so we still have enough and we can keep getting people home."

Mr Lobwein said taxi drivers had lobbied the Government for bi-annual fare reviews so they increased by smaller amounts more frequently to keep up with inflation.

"A couple of years ago it rose 27 per cent in 12 months. That was when our business did suffer," he said.

"This way we get small increases of 1 or 2 per cent at a time, rather than big hits.

"It's a pretty good result, when the public doesn't complain about it. Most of them have said 'gee, it's about time'. It's almost like people are saying 'good on ya' to the drivers."

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