TAXI drivers illegally soliciting for cross-harbour fares should be immune from police prosecution because they were providing an essential service, the chairman of the Urban Taxi Drivers' Association said yesterday. Chan Kam-pui said while he supported police action against ''choosy'' taxi drivers who only selected those fares which suited them, those providing a cross-harbour service should not be prosecuted. ''Although those drivers choosing to serve commuters going across the harbour violate the law, they are providing an essential service for the users,'' he said. ''I hope police would use their discretion while cracking down on taxi malpractices in general.'' Mr Chan was responding after Tsuen Wan police arrested eight drivers yesterday for allegedly refusing hire and failing to display the ''out of service'' sign. The drivers, aged between 25 and 50, were each released on $2,000 bail. The association tabled recommendations to Transport Department officials last month suggesting permanent pick-up points at tunnel entrances or allowing drivers to choose cross-harbour commuters. A department spokesman confirmed they had received the union's views on September 22 and were now studying the proposals. . The Transport Complaints Unit has said hire refusals went up to 301 in the first half of this year, compared with 205 in the same period last year. Topping the list of problem areas is Tsim Sha Tsui, with 44 complaints. Under road traffic legislation, any one found guilty of taxi malpractices, including refusing hires, is liable to a maximum fine of $5,000 and/or six months' jail.