Sydney taxi fares could be cut, following recommendations from the pricing watchdog.

The Independent Pricing and Regulatory Tribunal has conducted a review of taxi fares.

IPART says taxi services have become less affordable, with cost the main barrier to people catching taxis more often.

It will recommend a higher flag-fall charge, from 50 cents to $4.00, and a 2.5 per cent cut to the kilometre and per minute rate.

This would make shorter trips more attractive for taxi drivers, and long distance rates cheaper.

The chief executive of the NSW Taxi Council, Roy Wakelin-King, says the council has yet to see the report, but he says any cut to fares will badly affect taxi drivers and operators.

"If you have downward pressure on fares, that's going to be put downward pressure on viability for drivers and operators, " he said.

IPART has released its draft report today, with its final report to the NSW Government expected next month.