Taxi drivers are no longer facing a 40 per cent increase to their insurance premiums, after the Facility Association delayed its plans to boost rates in October.

"Very, very excited," says taxi owner Doug McCarthy. 

McCarthy's with an alliance of taxi drivers who have been fighting the increase.

"This is a start, hopefully, that will lead to a stabilization of insurance rates, not only for the taxi industry but also for the private consumer across the province."

McCarthy said some drivers are already paying $7,000 to $10,000 per car for insurance, and warned that a further 40 per cent increase would put some drivers out of business.

Jiffy cabs taxi St. John's Newfoundland

Taxi drivers have proposed changes to insurance rules to lower premiums (CBC)

"This will give us some breathing space," he said.

McCarthy believes the Facility Association — a non-profit organization that insures high-risk drivers — deferred the application for an increase because government committed to reviewing automobile insurance. Those changes could impact premiums.

The association is now looking for any changes to insurance rates to come into effect in March of 2018.

Taxi drivers met with Service NL Minister Perry Trimper earlier this week to outline their concerns, and suggested changes that could reduce rates. McCarthy said there's another meeting planned for next week.

Drivers on the Avalon originally threatened to strike if government didn't address the issue of escalating rates.