That sounds like a good deal tbh.
£27 for 7 hours care is just under £4ph - don't know if that's the going rate near you? We paid £3.50 a few years back in Yorkshire, but that was a longstanding arrangement & I think we'd have been looking at £4ph elsewhere.
Additionally, you pay £8 each day to cover the costs of 40 miles driving - that's really low at 20p a mile.
She now wants to increase this to £10 (another £10 per week = £2 per day) - still only 25p mileage, which I'd say is very reasonable.
It's irrelevant why she wants to charge £10 rather than £8 for the pick up/drop service - no point winding yourself up about her car or other mindees she has in it.
As others have said, the pick up/drop is unusual for a CM, so you might well struggle to replace that, unless you went for a nanny arrangement which isn't going to be cost effective for one dc.
Really, the questions you need to ask are: can I get someone else to do all this for less money, & is it worth the upheaval for the sake of £2 a day anyway?
Whereas from her POV, the driving is hardly making her rich, & now she's established & has a couple more mindees she'd probably be quite glad to drop it - the other parents may see 40 miles in the car every day as a disadvantage, so she'd quite likely be better off in the long run if you made other arrangements.
I think you probably need her more than she needs you tbh...