Three representatives of the District's taxicab industry testified at a hearing yesterday that they would be willing to accept less than the 22 percent across-the-board fare increase proposed last month.

"In essence, we are so hungry that we'll literally accept whatever they give us," said Fred Denby, executive director of the Professional Cabdrivers' Association.

The Public Service Commission, which regulates fares, held day and evening hearings yesterday to determine if last month's proposal by industry representatives and the office of the people's counsel is in the public interest.

Most of the about 60 persons who attended the second session of the Public Service Commission hearing, held in the evening for the public, were cabdrivers favoring the proposed increase. Citing risks, rising costs and heavy traffic, they said they are underpaid.

But Lloyde A. England, secretary-treasurer of the Alliance of Taxicab Businessmen and a 25-year cabdriver, testified that his group does not support the increase, maintaining that the real problem is a zone map that forces some riders to subsidize others.

"We need some relief and what we are getting is something but it does not solve the problem," England told a reporter. "The bad runs are still bad runs. This increase won't help people in Southeast who pay a five-zone fare while someone going a longer distance to Northwest pays less."

District fares are based on zones and range from a basic one-zone fare of $1.70 to $6.70 for an eight-zone ride. The proposed increase would raise fares by amounts ranging from 40 cents for one zone to $1.35 for an eight-zone ride.

Fares for extra passengers would be increased to $1.25 per passenger from 75 cents, and the charge for radio-dispatched cabs would rise to 75 cents from 65 cents. The rush-hour charge would increase to $1 from 65 cents.

Several witnesses who described themselves as frequent cab riders testified last night that they favored the increase, but also suggested that the commission consider improving service.

Norma Black, a blind employe of D.C. Services for Independent Living, said the PSC should look into what she said appears to be a pattern of bias against the disabled.

Superior Court employe Edith B. Wilson, confined to a wheelchair, testified that despite spending about $300 a month on cabs she is often late to work because drivers are reluctant to take her or pick up other passengers on the way, although she called the cab.

Former cabdriver Horace Holliday said he has trouble getting cabs to Southeast.

During the first session, in which industry representatives presented a case for the increase, Commissioner Ruth Hankins-Nesbitt asked each industry witness if he would accept less than the amount proposed.

Each time a witness said "yes," industry representative Dan Smith, a party to the agreement, cringed at a nearby table.

Smith said the group was supposed to present a united front based on a provision in the agreement that said: "This settlement agreement is expressly conditioned upon the commission's acceptance of all of its terms, without change or condition."

But Denby said the PSC had "never given the industry exactly what it wanted" and that one of the main concerns now is to get the drivers a fare increase as soon as possible. Denby said that a delay might mean a formal PSC hearing that could take from six months to a year.

In addition to having the approval of industry representatives, the proposal has been accepted by the PSC staff, which estimated that full-time District cabdrivers have a gross revenue of $10.39 an hour and net about $5.22 after expenses. The proposal is designed to increase the net hourly revenue to $7.81.

The PSC can put new fares into effect, but gave no timetable.