John Heron’s four-hour flight from Perth landed in Sydney on Tuesday, just before 10.30pm. The 75-year-old had booked a nearby hotel, about 1.5km away, to spend the night after the late arrival.

Heron grabbed his bag, left the airport and wandered over to the taxi rank across from the Virgin Australia terminal about half an hour later. A worker at the rank directed him to a taxi waiting in a bay. But Heron said the cab refused his fare because the trip was too short.

“He said, ‘oh no, you need to walk there’,” Heron recalled of the driver in a phone call with Guardian Australia. “Straight outside the Virgin terminal was the taxi rank, and it wasn’t very busy at all. There were lots of taxis.”

Heron was instead directed to another taxi waiting in the rank. He said he got the same response.

“How am I going to walk there, alone at night, along a pathway I don’t know?” he said. “It was a maze of roads, footpaths, no lights, so it would not be an easy thing at 11 o’clock at night to get there in the dark.

“And besides, I’m quite happy to pay for a taxi.”

Heron eventually did manage to get into a cab after speaking with a supervisor at the rank and snapping photographs of the two cabs that allegedly denied him a fare. The ride to the Moxy Hotel near the airport was less than five minutes, but he said he paid about $28, which he was happy to do.

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A worker at the hotel, who declined to give their name, said difficulties getting taxis to and from the Moxy were a known problem.

“If it’s from domestic, they usually walk,” the manager said of customers who stay at the hotel. If travellers want a ride, he usually suggest guests take an Uber.

The New South Wales government’s point to point transport commissioner issued 12 fare refusal penalty notices between January and June of this year, the latest period it has released data for on the matter. It issued 58 similar penalties last year, with more than a third of those in December alone.

In total, the commission has issued more than 1,200 fines in recent years.

The fine for taxi drivers for the first fare-related offence will be increased from $1,000 to $3,000 in an effort to deter drivers from overcharging, refusing fares or failing to use their meters.

The commission told Guardian Australia all passengers have the right to hire a taxi from a rank, including at Sydney airport, “regardless of how short the journey may be”. There are only certain limited circumstances where journeys can be refused.

The commission said in a statement that “the vast majority of taxi drivers in NSW do the right thing”. However, to support a new $60 flat fare trial which launched on Monday, “authorised officers are out in force at Sydney airport, conducting both plainclothes and highly visible operations”.

If a passenger is refused service due to a short fare, the agency said, they are encouraged to note the taxi’s number plate, company name and report the incident to the point to point’s taxi fare hotline.

Nick Abrahim, the CEO of the NSW Taxi Council, told the Guardian that while a majority of drivers do the right thing when it comes to accepting fares, any driver who failed to uphold the standards to the industry and abide by the law was unacceptable.

“We don’t tolerate that,” Abrahim said. “Whatever rationale the driver has, however long they’ve been waiting, that is not the fault of any passenger … and in actual fact, it is breaking the law.

“We are there to serve passengers, regardless of where they’re going, or regardless of how far that trip may be.”

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Abrahim said the council did take feedback and concern from drivers, some of whom have raised the issue of short fares from the airport. The council is actively working on a solution to support drivers and ensure passengers can get a ride when and where they need it, including some type of a short fare system.

But, he said, drivers must follow the law.

A new trial for fixed taxi fares from the rank at Sydney airport to the city’s CBD began on 3 November, widely seen as an effort to help cabs remain competitive with rideshare services. For 18 months, passengers travelling to a defined area in the CBD will be charged a set fare of $60 for a standard taxi or $80 for a maxi taxi.

That fare includes all road tolls, fees, levies and taxes, except for credit card or payment surcharges.

Asked about incidents like Heron’s, Sydney airport said in a statement to Guardian Australia that it takes fare refusal and passenger rights “seriously”.

“All passengers are entitled to a metered fare at regulated rates,” an airport spokesperson said. They urged passengers to report any driver who refuses a trip or fails to use the meter.

Sydney airport recently introduced a taxi concierge program, in partnership with the taxi council and the commissioner, to ensure drivers accepted all fares and operated meters correctly.

Heron said he understood the taxi’s point of view, but said some trips were long, and some were short.

“If that is a problem for short trips, maybe put a surcharge on it,” he suggested.

“I don’t mind paying a surcharge,” Heron added. “In fact I’d give him a generous tip if he’s a good guy.”

Have you had a taxi driver refuse to take you on a short trip? Contact nick.visser@theguardian.com