Taxi rides in Toronto just got a little cheaper as the city tries to even the playing field between cab companies and ride-sharing services, such as Uber.

On Sunday, the base taxi fare dropped from $4.25 to $3.25.

Councillors voted in favour of the price drop on Sept. 30, after days of discussion at City Hall between local politicians, cab company representatives and Uber executives.

“Toronto should have a competitive taxicab industry that serves both the public and drivers well. That’s why I supported council’s decision to reduce the minimum fare paid by the public by $1,” Mayor John Tory said in a statement. “This will make moving around the city more affordable for the public, and it will help the traditional taxicab industry compete.”

But some cab companies say while the reduced fare will help traditional taxis attract more customers, the move will ultimately cost more for taxi drivers who have to pay licensing and insurance fees that Uber drivers aren’t subject to.

“While this is a good day for our valuable riders, Beck would be remiss not to highlight this fare break comes out of the pockets of Toronto’s hard-working taxi drivers, who are still being forced to compete against black market providers who continue to ignore our city’s bylaws,” Beck Taxi’s operations manager Kristine Hubbard said in a statement.

“Enforcement of all existing bylaws should happen now to support Toronto’s law-abiding workers and to ensure that riders are offered the new, lower rate in safe and reliable taxis.”

UberX, Uber Canada's most popular service, has been operating in Toronto for a year. The service connects app users with people who have signed up to be drivers using their own vehicles.

The service has been able to get around the city's laws, claiming that UberX is a communication service, not a cab company. As a result, drivers working for UberX don't have to purchase taxi licences or complete the required taxi-training program. UberX rates start at $2.50.

In a statement issued Sunday, Uber said it welcomes the fare reduction for taxis and the increased competition the move could create.

“Lower fares are good news for consumers,” said Uber Canada spokesperson Susie Heath. “We believe that Torontonians deserve a safe, reliable and affordable ride in our city, and that taxi and ride-sharing can complement each other to better serve rider and driver needs in Toronto.”

But some cab drivers say the lost dollar on every fare is coming directly out of their pockets.

“The brokerage, they are charging (the) same fee. The insurance is charging the same fee,” said cab driver Reza Hosseinioun. And, gas and licensing fees have remained unchanged, he added.

Others are outraged that the City of Toronto has not banned Uber and say the fare reduction will do little help the traditional taxi industry.

“They come and steal the customers from in front of us,” cab driver Shamson Faidal said of driver working for the ride-hailing service.

The city’s Municipal Licensing Committee is in the process of coming up with a “regulatory framework” for all ground transportation in the city -- including Uber.

A report on the new framework is expected to come before council in the spring.

At the Sept. 30 meeting, the city also asked Uber to suspend UberX operations in the city until the new regulatory framework comes into effect. But Uber Canada executive Ian Black told reporters that the ride-hailing service will continue to operate in Toronto despite council's request.

Not all Toronto taxi metres will reflect the change right away, but all taxi cabs are charging the reduced base rate of $3.25.

With a report from CTV Toronto's Scott Lightfoot