Taxi operators and drivers are being warned they face repercussions if they charge more to transport disabled people.
North Tyneside Council say in some areas disabled customers have been charged more for a taxi or had their booking request refused.
And operators or drivers found to be overcharging for disabled passengers are being warned they could have their licences revoked as a result.
The situation has come to a head after some firms in Middlesbrough were found to be charging disabled customers more due to the length of time it was taking for them to get in and out of vehicles.
North Tyneside Council is writing to operators to make sure they are complying with the law after concerns were raised to the authority and the North Tyneside Coalition of Disabled People.
Information and signage will also be improved in wheelchair-accessible vehicles so that customers are aware of their rights.
Mayor Norma Redfearn said: “Taxis are literally a lifeline to many disabled people who rely on them to get out and about socially, to do their shopping or to attend medical appointments.
“Personally I find most taxi drivers in the borough are really friendly and helpful.
“They are always happy to help their passengers with little errands and many go above and beyond what’s expected of them to make life easier for disabled and vulnerable people – in fact I often call them the fourth emergency service.
“However, I’ve recently received complaints that a small minority are overcharging disabled people because it takes them longer to get in and out of the taxi.
“Others are refusing to send a larger wheelchair-accessible vehicle for just one person or demanding a high cost for it.
“This practice really is disgraceful – fares must be fair and this form of direct discrimination is contrary to the Equalities Act 2010 and will not be tolerated here in North Tyneside.”
Ian McKee, of North Tyneside Coalition of Disabled People’s executive management committee, said: “To discriminate against disabled people by overcharging for a private hire journey is totally unacceptable and illegal under current legislation.
“We fully support the council’s actions as we have had numerous complaints of overcharging on lots of occasions and they seem to be on the increase.”
If evidence of overcharging is discovered, the matter could be referred to the council’s regulation and review committee.
Action could range from a written warning to revocation of the licence.
The licensing service last wrote to drivers and operators in 2012 to advise them of the need to comply with the legislation.