The rates panel of the D.C. Taxicab Commission approved a proposal yesterday for an interim rate increase for city cabdrivers that could result in a 40-cent surcharge for each ride by the beginning of next year.

The proposal, which will be subject to a 30-day public comment period and a public hearing, came after more than three months of internal bickering between some panel members and commission Chairman Arrington L. Dixon. On Tuesday, Dixon took the long-stalled proposal to the full commission of 11 members in hopes of overriding the rates panel opposition, but the full commission decided to return the proposal to the panel, which met yesterday.

A staff-prepared proposal of a 16 percent increase per cab zone was dropped yesterday in favor of an amendment by Commissioner Lucille Johnson to institute an increase of 40 cents a ride. The proposal also calls for an increase from 65 cents to $1 for radio-dispatched cab rides.

The public also will be invited to comment on an age limit for cabs and tougher inspection standards although the panel did not specify any date or identify any new standards. A public hearing on the proposals has been set for Dec. 1 at the commission's headquarters, 2041 Martin Luther King Jr. Ave. SE.

Dixon, as well as several cab drivers, expressed reservations about a per-ride increase instead of a zone increase. "A per-ride increase will encourage drivers to operate in downtown where they can do a five- or 10-minute trip rather than go all the way to Anacostia or Bethesda," he said. "However, I propose that we move forward."

The passage of the per-ride proposal was met with groans and derogatory comments from the several cabdrivers attending the meeting.

Paul Davis, a cabdriver who regularly attends the meetings, made a slicing motion across his throat when the proposal passed.

Later he said, "Forty cents is a waste of time for us. They figured the increase on an average of three rides per hour but they neglected to point out that we don't always get three rides per hour."

Davis and other cabdrivers present said the increase would mean there would be little incentive for a cabdriver to take a fare to the far reaches of the city.

Commissioner Yale P. Lewis, who is a cabdriver, said after the meeting he expects that public comment will favor a greater increase than the the proposal passed at the meeting.

"Forty cents is just not enough and the public knows we are underpaid," he said. "There will be more cases of refusal to transport because we are not paid enough to make the long rides."

The interim increase was proposed, in part, to offset an expected insurance increase of about $12 a driver that was expected to go into effect last Sunday. However, Dan Smith, owner of several cab companies in the city, filed suit with the U.S. Court of Appeals, which rescinded the order Oct. 23 and remanded the increase decision back to the city's insurance officer for review.

Today marks the end of the controversial, 120-day moratorium the commission imposed on the licensing of more cabs. Dixon said the purpose of the moratorium was to give the commission time to organize and study the problems of the cab industry without having to deal with new cabs coming into the system.

"We did get some things done during that period," he said. "We will look back and wish we had done more. This would have been the time to deal with vintage {age} requirements but the rates and rules panel was not ready to do that."