At present, only fleet cabs are permitted to use AC.
State Transport Minister Diwakar Raote said new black and yellow cabs come fitted with air conditioners but passengers cannot use the facility because it is not permitted.
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He said fare for such facility would be finalised accordingly.
"The idea is to ensure daily commuting in Mumbai gets smooth. Such a facility is the need of the hour in a city like Mumbai where humidity is high. It will be comfortable also for patients who hire services of black and yellow taxis," Roate said.
"There will be a separate rate card for availing the facility," he added.
The minister has instructed the transport department to prepare rules and regulations before the final approval.
Raote said autorickshaws and taxis, including fleet cabs, will have to display information about drivers and regional transport office (RTO) permit prominently in vehicles from February 1.
They will also have to display the toll free RTO number, police helpline number and women security helpline numbers.
He said rules need to be framed for app-based taxi services like Uber.
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