Taxi drivers in Skipton are being subjected to a torrent of racial abuse and discrimination.
The liaison group of taxi drivers, police and Craven District Council, which issues licences, heard that racist passengers are refusing to be taken in a taxi if the driver is Asian.
But taxi drivers could hit back by refusing to carry passengers who insist on white drivers.
The group met to discuss incidents in Skipton when serious criminal offences resulted in taxi drivers going on "strike" for a period and blocking Sackville Street.
Coun Mike Hill, chairman of the liaison group, said Asian drivers had to put up with terrible abuse, which could not continue in modern society.
"The taxi drivers are trying to operate an orderly system, but racist passengers are bypassing it," he said.
Coun Hill said a system similar to the Stand initiative operated by licensees, in conjunction with the police, which bans troublemakers from pubs in the town could be implemented for taxis.
People who refused to travel in a taxi driven by an Asian could find themselves on a boycott list.
Taxi drivers also agreed that passengers who passed Asian taxis in the Skipton ranks until they found a white driver would be directed back to the first cab. Not all drivers were represented at the meeting and Coun Hill said methods were being considered to ensure the policy was adopted by all taxis.
Police representatives warned Asian taxi drivers not to take the law into their own hands and to leave enforcement to them.
The police were unhappy that tensions during a Boxing Day conflict could have been exacerbated when they were called to an incident on Greatwood and found themselves competing with more than a dozen taxis who had rushed to the scene.
The police also urged taxi drivers to report all incidents to them. "The drivers were told to leave it to the police to sort out any trouble and the council backs that fully," said Coun Hill.
A request for a reduction in the number of licence plates for Skipton was turned down.
Coun Hill, who used to be a taxi driver himself in his native Liverpool, said the law of supply and demand should dictate the numbers.
"If there are too many taxis, then they will go elsewhere but if you start restricting the numbers then you put a value on the plate, which can be sold on from one taxi driver to another, perhaps for large sums of money," he said.
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