Victorian taxi users who pay with a credit card will soon get a cheaper ride after the state government told monopoly payment company Cabcharge to slash card-payment fees.

The Napthine government cut the card surcharge on Cabcharge's electronic payment system from 10 per cent to 5 per cent on the recommendation of an 18-month inquiry into Victoria's taxis by former ACCC head Allan Fels.

Charge back ... Cabcharge has been told to slash credit fees in Victoria. Credit:Penny Stephens

The recommendation prompted Cabcharge's founder and CEO Reg Kermode to say: "Bugger it, if that's what you want, you can all go back to cash."

Shares in Cabcharge plunged 15.3 per cent, or 75 cents, to close at $4.15. Today's decline pushes the company's share price into negative territory for the year, to -5.25 per cent, valuing the Sydney-based business at $500 million.