Victorians could be slugged a $1-a-trip tax in taxis, hire cars and ride-sharing vehicles, as the state government tries to compensate existing taxi owners for the business they have lost to Uber.

Taxis will be able to set their own fares in Melbourne, Uber will be legalised and customers will be given fare estimates prior to booking, under proposed state government reforms designed to level the playing field.

Uber Technologies has asked its Russian drivers to temporarily bear the load of a new tax charge.

Public Transport Minister Jacinta Allan presented a plan to deregulate the industry to colleagues on Monday, saying the state government was prepared to buy back taxi licences, according to News Corp.

When asked by Fairfax Media to confirm details of the plan, Ms Allan said it was "no secret" the government had been working to reform the ride-sharing industry and details would be announced "once they have been finalised".