Hundreds of furious taxi and hire car drivers are threatening legal action - including a possible grand final day strike - over an Andrews Government move to deregulate the industry.

The group claims they stand to lose millions of dollars spent buying now-worthless licences.

Drivers at the meeting in Bulleen on Sunday. Credit:Channel 7

Under a major shake-up announced last week, hire car operators who paid as much as $60,500 for licences will get just $25,000 in compensation for their first licence, $12,500 for their second, and nothing for every other licence.

The compensation provisions for hire car operators are far less generous than for taxi licence holders, who will get $100,000 in compensation for a first licence and $50,000 for a second. Even still, they say it's just a fraction of the licences' previous value.