Chorley Hackney Carriage Association claim Chorley Council's proposals for added safety checks and conditions will make it more difficult for taxis to operate.
The local authority say the measures are necessary to crack-down on rogue Hackney and private hire operators who miss or fail tests but carry on driving.
The council is looking at testing every vehicle that is more than three years old, however, taxi firms claim there is no basis for the plans.
Drivers say that more stringent regulations and the possibility of added costs would make it harder to earn a living in times of rising fuel prices and increasing taxes.
Hackney cab driver Mohammed Essa, 40, said: "We are very unhappy with the proposed changes.
"Many Hackney and private hire drivers feel that the new rules don't make much sense - why fix something if it's not broke?
"There are already a lot of regulations and we pay a lot of money to get a licence to be able to drive.
"The council say they are doing it to improve safety but I think it's unfairly targeting all drivers when 90 per cent are decent and the minority is responsible for breaching safety regulations.
"I hope the council can can come to some agreement and that we can find some common ground - if not , we are considering taking legal advice which could end up costing us thousands of pounds."
The safety checks would include testing for bumps, scratches and dents to vehicles' bodywork as well as sufficient space for luggage.
Under the proposals, the checks would be carried out every six months until the taxi is eight years old and every four months for cabs that are older than eight years.
The safety tests are estimated to cost around £20, depending on the garage where they are carried out.
The council is also looking at getting drivers to change their licence plate after every safety check, which would also come at an extra cost.
Andy Docherty, Chorley Council's corporate director (governance), said: "We are currently reviewing the testing procedures for taxis in Chorley to help improve safety for passengers and drivers.
"We have received a letter outlining some suggestions from drivers and we will take these on board.
"We were due to sit down with taxi drivers and their representatives on Monday to discuss their concerns but no-one turned up at the meeting.
"All our licensing regulations are in line with government guidance and we want to work with driversto make sure we continue to provide an excellent taxi service in Chorley."
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