Taking a taxi ride in New York City just got a lot more expensive. The New York City Taxi and Limousine Commission (TLC) formally approved a fare hike Thursday that will raise prices by 17 percent starting this September. The base fare of $2.50, however, will not change.

The average cost of a three-mile ride in America's largest city will rise from about $13 to $14 when the cab meters begin charging riders in 50-cent increments for each fifth of a mile traveled, or for each minute in stopped or slow traffic, up from 40 cents for the same presently. The fixed rate for a ride between Manhattan and John F. Kennedy Airport will climb from $45 to $52, excluding tip and tolls. The trip between Manhattan and Newark Liberty will also rise, from $15 to $17.50.

The commission voted in favor of the hike 6-2, with one abstention.

New York cabbies were thrilled with the commission's formal approval on Thursday. That's because the extra money will not go to the fleet owners but to the drivers themselves. The commission voted to allow cab drivers, whose pay has lagged behind inflation, to have their first-ever disability insurance program for those unable to work due to injury or illness.

TLC Chairman David Yassky said drivers must pay a fleet owner approximately $120 a day for use of a cab and its medallion. He also noted that, on average, drivers take home approximately $130 after a 12-hour shift. They'll go home with around $165 when the fare increase -- the first in six years -- goes into effect in the fall.

The rate hike will make New York City the fourth-costliest in the world for taxi rides, behind Tokyo, San Francisco and Los Angeles, according to a commission comparison of a dozen cities with a large number of taxi riders.

Yassky acknowledged that ridership could fall but said that historically, fare increases have only resulted in a slight decline in demand.

New York's 13,000 iconic yellow cabs carry an estimated 600,000 people on 450,000 trips daily.