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The Commerce Commission says it is concerned people are paying excessive card surcharges in taxis.
It comes as one company, Wellington Combined Taxis, has dropped its flat fee which it has been applying to Eftpos payments in order to comply with Commerce Commission rules.
But other taxi companies are continuing a surcharge the commission says is unjustifiable for consumers.
Last month, RNZ revealed one Wellington Combined Taxi passenger was hit with a 26 percent card charge when paying the flat $3.80 fee by Eftpos on a December fare to Wellington Airport.
Peter Sullivan is another Wellington Combined customer who paid the charge when using his Eftpos card on a taxi trip in Johnsonville in July last year.
The trip cost $11.50 and the $3.80 card cost resulted in a surcharge of 33 percent on the fare.
Sullivan said he questioned the fee with the driver.
"I said that's not supposed to apply to ones that are swiped, like Eftpos cards, and he said 'no it applies, it applies, it applies'.
"We went backwards and forwards and in the end I said 'I am going to your company and I'm going to complain about this because I think it's wrong'."
The company eventually refunded Sullivan with a $10 voucher.
The Commerce Commission said card charges should not apply when customers insert or swipe their Eftpos or debit cards because that method did not cost the merchants.
Paywave and credit card surcharges should also not exceed the costs incurred by the retailer.
Following a story on RNZ's Morning Report, as of mid-February, Wellington Combined Taxi chair Dave Clyma said it was dropping its card charges for Eftpos, paywave and credit payments.
"We've been endeavouring to set up the system to deal with credit cards and Eftpos separately.
"It was going to take some considerable time before the Eftpos supplier was able to do it.
"So we made an arbitrary decision that in terms of what was best for the public interest, and in order to ensure we complied with the commerce commission, we would change both."
However, the company has since put on another service fee of $2, which will now apply to all people paying with cash and card.
Commission chair John Small said he was "concerned" about excessive card surcharges across the taxi sector as well as by parking providers.
The Commission has received complaints about seven different taxi firms for unreasonable surcharging.
"We don't mind if someone has a cost-based surcharge that makes reasonable sense, but we are concerned when merchants use whatever opportunity they've got at the point of sale to tax the transaction over and above what it costs them."
Blue Bubble Alliance is the country's biggest taxi brand with branches in 16 different centres.
Chief executive Bob Wilkinson said he believed all the individual branches around the country applied this flat Eftpos charge which was decided by their boards.
Another company, Kiwi Cabs, also told RNZ it applies a $2.30 Eftpos card charge for the cost of the machine.
Wilkinson said the taxi sector was considering how it could remove the Eftpos charge without hurting the business.
"Taxi companies are saying it's been part of our pricing for so long and it's part of the money which comes in to run the business, rightly or wrongly, that's how it's been done.
"But it will not result in cheaper rides for passengers."
Consumer NZ chief executive Jon Duffy said taxi companies should never have been applying the charges in the first place.
"The Commerce Commission has been quite vocal about the fact it will be looking at the taxi industry, so I would be looking at my policies if I was an infringing taxi company and changing them pretty quickly so as to not to face enforcement action."
The commission said businesses needed to remember that any surcharges it added must be clearly disclosed and the reasons for it accurately described to avoid breaching the Fair Trading Act.
Small said the commission would begin thoroughly looking at the taxi sector in the coming months.
