Starting this Sunday, an extra 50-cent surcharge will be added on all taxi rides.
The fare hike was passed by the state Legislature back in May as part of the Metropolitan Transportation Authority's $2.3 billion bailout plan.
The money collected will help fund mass transit.
Starting at 12:01 Sunday, all cab fares will include a 50-cent tax – increasing the base taxi fare from $2.50 to $3.
All cabs are required to have a sticker posted on the passenger doors alerting riders of the fare increase.
Some cab drivers who spoke with NY1 said they are concerned they will not get as many passengers with the increased fare. Passengers say that's definitely a possibility.
"It's going to be affected, because it's going to be too much [money]," said one driver. "Like after 4 o'clock, it's going to be almost $5 just sitting in the car."
"Why are we paying for the MTA?" asked another cab driver. "We don't have any benefits from the government. So this is not good."
"I've lived in New York for 11 years, I tried to take the subway all the time," said a passenger. "I'm only taking a cab because work is paying for it. So I think it's awful. I think they're high enough already."
“I don't think it's necessary or fair to make people taking cabs support people taking the subway, because maybe they don't take the subway, and they're already increasing fares on the subway,” said another.
However, there are those who say the surcharge will not stop them from hailing a cab – especially at odd hours.
“It's starting to get hard, but [the fees] probably won’t stop me,” said one frequent cab rider. “Sometimes it's hard to wait for the bus, so probably not.”
“I think the average person, a hardworking person like myself, really wouldn't care,” said another. “It wouldn't matter to us, at least for me.”
And although the fare hike was not supposed to take effect until this weekend, the Taxi and Limousine Commission says some cabs mistakenly charged the extra fee on a couple of days last week.
Meters from two suppliers accidentally put the 50-cent surcharge into effect a week early.
The mixup affected 288 meters, and about 4,000 trips were overcharged.
The errors were discovered in time to limit the number of affected cabs to about two percent.
The TLC says it's made arrangements for the companies who make the meters to refund the overcharges.
If you believe you were overcharged, you can call 311 or submit a claim at nyc.gov/tlc.
Meanwhile, it's not only taxi riders who will be paying more. Business owners are also sharing the burden.
Monday is the deadline for businesses to file their first quarterly payment of the state's new 0.34 percent payroll tax.
The tax applies to businesses within the MTA's 12 ridership counties, including all of the five boroughs.
Business owners with quarterly payrolls of at least $2,500 are required to pay up.
The MTA is planning another fare hike in 2011 as part of the deal approved by state lawmakers.