Chorley Borough Council's licensing committee will hear next week that some drivers are flouting the law.
It is an offence for any driver of a private hire vehicle or hackney carriage to fail to wear a badge which has to easily be seen by customers.
But the council has learned there are a number of drivers who persistently refuse or fail to wear them.
Some have already been warned about the consequences by the taxi enforcement officer.
Now the committee will decide what further action to take when it meets next Wednesday, September 6.
In a report from borough solicitor Richard Townson to councillors, two recommendations were put forward.
Firstly, that the committee backs a tougher line against such drivers.
And in addition, that it supports a clamp down against persistent offenders, and where appropriate, prosecutes.
But drivers agreed badges should be worn.
Lewis Baker, aged 55, chairman of Chorley's Hackney Carriage Owners' Association, said: "One of the reasons we wear badges is to let the public know we are licensed and properly authorised to drive the vehicle.
"It helps to identify the driver if anything goes wrong and puts people's minds at rest."
He said badge wearing was particularly assuring for women passengers who needed to safe in the knowledge that the driver was registered.
He added: "Most do wear badges. It is the odd occasion, they don't. But I have done it myself and forgot the badge and left it in the house and you go back and get it.
"Drivers should wear them. Laws are made and we have to abide by them."
Simon Hindle, aged 39, owner of Chorley's Four Sixes private hire firm, said: "It is part of the regulations that you do wear a badge. If a driver isn't they should be.
"It is identification to the customer that the cab and the guy driving it is properly authenticated.
"I ensure all my drivers have their badges on before they go out."
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