NEW YORK (Reuters) - Mayor Michael Bloomberg on Wednesday called for stiffer penalties for taxi drivers who illegally refuse to pickup passengers, criticizing the driver recently accused of mowing down two men after refusing to drive them to the Bronx.

Bloomberg asked the City Council to roughly double the penalty for a first offense to $500, and impose a $750 fine and an automatic 30-day suspension for a second offense within two years. He would leave unchanged the penalty for a third offense within 36 months: the revoking of the driver's taxi license.

"It doesn't matter which borough you're coming from or which borough you're going to, New York City cab drivers are required by law to take you anywhere in the city," Bloomberg said at a news conference at City Hall. "Every person who puts a hand in the air to hail a cab deserves to be treated the same."

Most cabbies work hard and do not break the rules, but there are a few bad apples, Bloomberg said.

James Vacca, a City Council member and the chair of the council's transportation committee, said he would introduce a bill this month to enact Bloomberg's proposals.

Bloomberg referred to the dispute that took place around 4 a.m. on Sunday in midtown Manhattan after four men hailed a cab and asked to go to the Bronx. The driver, Mohammed Azam, refused, instead driving the men to a nearby police station to see if the police would support his decision, according to the police account.

The police told Azam he had to make the trip. Outside the station, Azam's cab hit two of the passengers, hospitalizing both and leaving one in critical condition. Police arrested Azam and charged him with vehicular assault and leaving the scene of an accident.

David Yassky, the taxi commissioner, said on Wednesday that there were 2,887 reported refusals between July 2010 and February 2011, an increase of 36 percent from the same period a year earlier.

It was not clear how many of those refusals were illegal, although a spokesman for the Taxi and Limousine Commission said the majority of complaints ended in convictions. Drivers are allowed to refuse drunk passengers and can also refuse fares if their shift is ending, among other exceptions.

Bhairavi Desai, the executive director of the driver advocacy group, the New York Taxi Workers Alliance, said the city was maligning cabbies by singling out the actions of a very small minority. She said the mayor was being "opportunistic" in promoting his proposals with Sunday's fare-refusal dispute before the criminal case had been heard in court.

"All the city is doing is pitting the riders against the drivers," she told Reuters. "They're scapegoating drivers."

(Reporting by Jonathan Allen; Editing by Barbara Goldberg and Greg McCune)