The over-issuing of taxi licences has flooded the market to such an extent that drivers are struggling to earn a liveable wage, Denison independent MHR Andrew Wilkie says.
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Mr Wilkie said the state government needed to rectify the situation through the implementation of a licence buy-back scheme and impose restrictions on ride-sharing program Uber.
"The bottom line is the taxi industry is on its knees, the Uber drivers aren't making any money, and something has got to be done about it," he said. "Not only do we need to rein in Uber but we need half the number of taxis on the road."
Mr Wilkie said the government should limit the number of Uber drivers on the road and place restrictions on the areas in which they operated to deliver a fairer outcome for the state's taxi drivers.
Taxi driver Ewen Bleathman said he spent $88,000 on his taxi licence but believed its resale value would only be worth between $20,000 and $30,000.
He said drivers on average made half the amount of money now compared to five years ago.
"Working 14 hours a day, you'd be lucky to earn $150 a day," Mr Bleathman said.
Infrastructure Minister Michael Ferguson acknowledged an influx of Uber drivers had created competitive tension.
"The government is working to ensure a level playing field ... and we will have further announcements on this before the end of the year," he said.
Mr Ferguson said a moratorium on new plates had expired but the government would look at its implementation again.
According to State Growth figures, there are 605 valid taxi licences across the state and 1464 registered Uber drivers.