The argument presented by Norman Saunders in "40 Cents a Ride Won't Get Cabs to Northeast" {Close to Home, Nov. 15} is without merit.

First, the D.C. Taxicab Commission has not passed a 40-cents-per-ride fare increase for the city's taxicab operators. On Nov. 4 the Panel on Rates and Rules gave notice of its intent to 1) modify the existing rates and charges by permitting an increase of 40 cents per drop to the existing fares; 2) amend the existing charge for radio calls from 65 cents to $1; and 3) seek public comment on these and other issues at a hearing scheduled for Dec. 1.

Saunders argues that a 40-cents-per-drop increase would do nothing to encourage cabdrivers to take trips to and from zones in the Northeast and Southeast sections of the city. He says that only higher fares to these zones, as the commission chairman, Arrington Dixon, has proposed, would encourage cabdrivers to make these trips.

But why penalize passengers with higher fares because of where they live? Why add another burden to these residents, especially those with limited income? Those who are familiar with taxicab operations know that failure to travel to, say, Southeast is not solely a distance problem. There are drivers who travel to and from these areas who find the trips profitable.

The question, then, may be whether licensed drivers really know how to hack. Do they know the geography of the outlying areas? Do they know how to engage in group and shared riding? Are they biased against the race, sex or age of a person or even the size of a group? What is happening may well be a matter of hacker conduct. Contrary to what the supporters of the Dixon proposal would have you believe, an increase in the dollar amount would not cure these prejudices.

The guidelines and standards for the Panel on Rates and Rules are clear. The law states, in part, that this group shall balance equitably the interests of the taxicab industry against the public interest in maintaining a taxicab system affordable to a broad cross section of the public. The law says the panel shall establish nondiscriminatory rates, charges and methodologies for the determination of taxicab fares that ensure reasonable and adequate compensation and promote broad and nondiscriminatory public access to taxicabs. The Panel on Rates and Rules recognized the serious problems that an interim fare increase based on zones would have presented. It chose, in spite of the criticism, to move in a fairer way, recognizing the requirements of the law and the interests of all citizens in proposing a temporary increase.

The panel introduced, after study and analysis, the 40 cents per trip or "drop" proposal based on the cost-of-living index. The last increase for taxicab drivers was in March 1985. The Public Service Commission determined the hourly earnings for taxicab drivers. Using this figure and the cost of living index for 1985, 1986 and an assumption for 1987, the adjustment to the hourly rate was established. That adjustment, assuming an average of three trips per hour, resulted in a recommendation of an increase of 40 cents per trip to temporarily offset rising costs in operations and the pending insurance increase. The Panel on Rates and Rules, as prescribed by law, will institute a complete review of the rate structure.

In contrast, the Dixon proposal to increase the fares by zone was based on a six-year-old study whose methodology was flawed. That is why the panel on rates rejected it. The proposal under consideration is based on an established guide for determining wage and fixed-income increases. It is a set fee equitably balanced for every rider. It places the burden on the driver to improve services.

What can a cabdriver who makes three trips an hour hope to make? Starting at Georgia and Missouri avenues at 8 a.m. heading south to 10th and Pennsylvania Avenue NW with the first passenger, a taxicab driver could pick up three other passengers for a total of four "drops" in approximately a 20-minute run. This is a three-zone trip costing $3.90 per person plus the 40 cents for a total of $17.20 -- with a possible tip from each passenger for courteous, prompt, safe service in a clean and mechanically well-functioning taxicab. This is only one example of what a cabdriver could earn.

No fare increase, certainly not a temporary one, would resolve the major problems that exist with our taxicabs nor would it satisfy every member of the industry. Other means must be sought to bring change.

I hope that the taxicab industry will come to realize that working to improve services through rate increases and other methods is the responsibility of all of us. This is a two-way street. Changes in rate structure require taxicab data from associations, fleets, companies and independent drivers. Efforts to obtain information must be met with cooperation to yield accurate and impartial data for making determinations. Changes must begin to be made by our drivers for the betterment of the taxicab system. And the public must come forward to express its support. The December hearing provides a first opportunity. -- Lucille L. Johnson is a member of the D.C. Taxicab Commission's Panel on Rates and Rules.