Pablo Blazquez Dominguez/Getty Images Uber’s European breakthrough Brussels is embracing Uber, set to make ride sharing legal.

In a small victory with large symbolism, Brussels could soon drive change in continental Europe by becoming the first city to embrace the ride-sharing service Uber.

Legislation currently being drafted by Brussels mobility minister Pascal Smet, and expected to be passed by January 2016, would turn Uber’s 700 drivers into independent contractors, who would pay income taxes. However, Uber would have to be a second source of income, according to a draft report seen by POLITICO on Tuesday.

While Brussels (with about 1.1 million inhabitants) is a relatively small capital city, the move is bold and reverses the city’s ban on Uber last year. The California-based company has faced violent protests in Brussels, as well as in Paris, Madrid and Berlin. Last month, a German court banned Uber and said it would slap lawbreakers with heavy fines.

And the proposed blessing by Brussels will surely face a backlash because it comes with a big catch: a complete overhaul of the city’s taxi industry. Under a draft of the law, the cap on taxi licenses would be reviewed and potentially eliminated, opening up the market to a flood of competition.

Uber is technically illegal in Brussels but that hasn’t stopped the company from gaining a large share of the market. There is one Uber driver for every two taxis in Brussels, showing how fast the app-based service has exploded in popularity.

“As compensation for the taxi sector they will remain the ones with the right to use taxi lanes, they will be the only ones who can be flagged down on the street,” said Alexander De Croo, deputy prime minister of Belgium and a proponent of the change.

However, all traditional taxis would be required to install credit card readers, which could help reduce undeclared cash fares. The average declared gross income is €25 a day, De Croo said.

Uber has endured a tense relationship with authorities globally, as they struggle to adapt to its game-changing disruption of a traditionally unionized taxi industry.

Detractors argue that Uber isn’t on a level playing field: drivers can undercut the cost of taxis because they aren’t forced to have public liability insurance and don’t have to fork out for expensive licenses.

“There was the same level of reticence with regards to Uber in many cities across US this time two years ago. Now, dozens of states are embracing and adopting bills on both city and state level. There is now huge momentum in the states. Now we are starting to turn a corner in Europe,” said Mark MacGann, Uber’s head of public policy for Europe, Middle East and Africa.

So far, only some parts of Europe, such as the UK, have embraced the ride-sharing app (despite protests from the black cabs).

Governments tend to keep taxis in artificially short supply by capping the number of licenses permitted at any one time in cities, meaning that in some places the licenses cost more than apartments. Governments that try to lift caps face stiff objection, which can take the form of crippling strikes.

But the political parties in Brussels that drafted the legislation say they now have enough votes to pass it.

Els Ampe, chief whip of the Open Flemish Liberals and Democrats party and one of the key proponents, wants parliament to vote without delay to capitalize on a consensus reached on the proposal in February.

“People are getting convictions for something that will be totally legal in a few months,” she said.

This story has been updated to reflect additional comment from Alexander De Croo and to clarify the legislation is being drafted by Pascal Smet.