D.C. City Council member Betty Ann Kane (D-At Large) urged the city's Public Service Commission yesterday to reconsider its decision allowing taxi riders to prevent cabdrivers from picking up extra fares, and said she will propose legislation to take away the commission's authority over taxis.

Commission officials said the new rule on sharing cabs is scheduled to take effect July 1, but would be delayed if the commission decides to reconsider the decision.

Kane, who chairs the City Council committee that oversees the PSC, said the commission treats taxis as a "stepchild" and instead focuses its attention on regulating utility companies, including deciding complex rate-increase requests by the telephone, gas and electric companies.

Her legislation would shift all authority over taxis to the city's transportation department, which already assists the PSC in regulating cabs.

Under the current system, the commission sets taxi fares and adopts other regulations for cabs. The transportation department is charged with enforcing the commission's decisions, hearing complaints against drivers, and licensing and inspecting taxis and their drivers.

Representatives of several taxi driver organizations, appearing at a meeting of Kane's committee yesterday, said they would welcome no longer being under the commission's jurisdiction.

"We have no confidence in it and we're tired of it," said Melvin Ailer of the Fraternal Order of Taxicab Operators.

Spokesmen for the drivers said that an example of the commission's "insensitive" treatment is its failure to decide a pending driver-initiated case, filed in 1979, that among other things seeks to reduce the size of the city's taxi zones and thereby increase fares. In contrast, they said, the commission took only three months to change the cab-sharing policy.

Commission Chairman Ruth Hankins-Nesbitt said in an interview yesterday that it would be premature for her to comment on Kane's proposal. Hankins-Nesbitt said the commission treats taxicabs "with the same respect, recognition and attention as all other people we regulate."

Last week, the commission rescinded an earlier rule, passed during the 1973 gasoline crisis, that gave cabdrivers the authority to decide whether to take multiple fares. The new rule will not eliminate cab sharing, but gives passengers the authority to decide whether the cab in which they are riding may pick up additional fares.

Spokesmen for taxi drivers said that there was no major public demand for the change, that it will reduce their income and that it will curtail service to far Southeast and Northeast neighborhoods. They also attacked the commission for not holding a public hearing on the new rule.

Commission members said the change was designed to benefit the public, that the commission received telephone complaints about cab sharing and that there is no evidence drivers' income will drop. They said the PSC was not required to hold a public hearing. Instead, it solicited and received written comments.

At yesterday's hearing, all seven witnesses representing various drivers' groups opposed the new policy. However, the lone witness representing taxi companies said the new rule was necessary.

Dan Smith, who spoke on behalf of five cab companies, said he has received numerous complaints from customers saying they missed appointments because drivers picked up additional passengers who were dropped off first.

"We're losing a lot of customers because of the shared riding plan," Smith said.