City transportation officials yesterday proposed giving the D.C. City Council the power to set taxicab fares and recommended a series of measures to curb abuses by drivers.

Robert O.D. Thompson, transportation systems administrator for the D.C. Department of Public Works, urged the City Council to take over the job of setting fares, with the help of specially appointed hearing officers. Taxi rates currently are regulated by the D.C. Public Service Commission, a non-elected body.

The public works agency and the D.C. Council are weighing several plans to overhaul taxi regulations because of complaints by cab drivers about delays in getting higher fares and allegations by patrons about abuses by hackers, including overcharging and refusing to take riders to some areas of the city.

Thompson's proposal, made during a City Council hearing, drew objections from council members.

"You're talking about politics setting the rates if you put it over here in the City Council," said council member John Ray (D-At Large). "I think that would be a disaster."

Nevertheless, council member Betty Ann Kane (D-At Large), who heads the council's public services committee and presided over yesterday's informal hearing, cited Thompson's testimony as an indication that city officials were moving toward supporting legislation she has proposed.

Kane has recommended a bill that would abolish the Public Service Commission's authority over taxicabs and consolidate taxi regulation under a new commission on taxicabs within the Department of Public Works. Thompson suggested establishing a commission to set taxi rates as another option.

The Public Service Commission last increased taxi fares in December 1981, when rates rose by 15 to 25 cents a ride. Fares now range from $1.45 for a trip within a downtown area, known as a subzone, to $6.70 for an eight-zone ride. The commission recently began considering revising taxi fares, and officials said yesterday a decision is likely by next spring.

Howard C. Davenport, the commission's general counsel, said the commission wants to retain and broaden its authority over taxicabs because it believes it "can do the best job possible." Abolishing the commission's control over taxis would require an amendment to the city charter.

Thompson said the city is considering several moves to reduce misconduct by taxi drivers, including appointing more hack inspectors, establishing intermediate-level hearing examiners to speed hearings on complaints, increasing fines and tightening license examinations.