Gwynedd council has dropped a plan for two-tone taxis, but there will be different colours for private hire and taxis.
Taxi drivers in Gwynedd are angry about any plans which could mean vehicles have to conform to certain colours.
The council said the colours will ensure the public can easily recognise registered vehicles.
But some operators said anyone could paint their cars in those colours and ferry people around while unlicensed.
The recommendations (PDF) went before the authority's central licensing committee that hackney cabs will be black with red bonnets and backs, and private hire vehicles will be white with yellow bonnets and back.
Gwynedd council licensing officer Amlyn ab Iorwerth told the meeting: "We need to help people understand the difference between hackney and private hire vehicles.
"There are regular complaints from users that it's not always easy to distinguish between the two."
He admitted that the proposals for red and yellow bonnets hadn not been universally popular: "There have been some letters of support, but we should also listen to those taxi operators who have objected."
Councillor Louise Hughes, of Llais Gwynedd, said: "It's totally bonkers to ask drivers to spray their car bonnets different colours.
"In this difficult economic climate, we shouldn't be hitting them with additional costs".
Coun Peter Read said he agreed that a single colour would work, "but it needs to be phased in over time".
Taxi companies will now be consulted on the new plans.
Speaking before Friday's meeting Llinos Chubb, from one Bangor taxi firm, said they were "totally against" the proposals.
She said: "The worry about the proposed changes is safety to the community and to our passengers.
"There would be no difference between the taxis at all if they were all the same colour.
Mrs Chubb added: "All our vehicles are white and with Chubbs Cabs written on the side of them.
She said that if all were the same, "how do you define which company you're from and who you work with? And that gets much more difficult then."
Mrs Chubb said there would also be cost implications with any changes to cab colours.
"Because we run a fleet of white vehicles, the cost implication will be £150 to get the bonnet sprayed yellow.
"But if you bought new cars, then they would have to be white or black the defining colours and then you'd have to spray the colour, again yellow or red."
Other changes to taxis in Gwynedd will also be considered at the committee meeting.
These include removing a condition that every licensed vehicle must be less than 10 years old and introducing another that vehicles must be under six years old when they are first licensed.
The spokesperson added that at a recent meeting with a cross-section operators general support was give to the possible changes.
Any changes would not include private hire vehicles, which only transport children to school.