People taking taxis could soon pay a levy to help fund an expanded assistance package for WA's taxi plate owners.

A steep decline in taxi use and a devaluation of licensing plates has led the State Government to overhaul its taxi reform assistance package.

Transport Minister Dean Nalder has ordered his department to develop a plan to impose a levy on cab and charter rides to fund an expanded assistance scheme.

The existing package includes a $20,000 transition payment and a $6 million hardship fund, but Mr Nalder has conceded more help was required.

"It has now been acknowledged by the Government that it may be appropriate to provide further transition assistance for conventional and multipurpose taxi plate owners," Mr Nalder told Parliament.

"To that end I have now asked the department to explore a levy on every charter and taxi trip to fund the additional payment and to also determine how long the levy should be in place."

It was a stark contrast to his optimistic assessment when he faced questions during Budget Estimates hearing just over a month ago.

"What we're saying is that there was a degree of uncertainty in the market, we're providing certainty into the market at this place. We've put funding mechanisms in place to support the industry to get moving. And we believe they are the right measures at this point," he told the hearing on May 24.

Government urged to change scheme

The Government has been under pressure for months from both the taxi industry and the State Opposition to revise its scheme designed to help cab operators successfully shift to a new regulatory regime.

Last week, Mr Nalder was heckled and jeered in Parliament by a gallery of angry cab owners dismayed by the Government's offer of assistance.

Opposition Transport spokeswoman Rita Saffioti said the Government's approach had been wrong from the start.

"There needed to be reform of the taxi industry but there needed to be fair assistance to the taxi plate owners," she said.

Ms Saffioti said with some operators buying plates for $300,000 as recently as 2013, it was clear under the assistance package many would face substantial losses.

"Many taxi plate owners have seen a lot of value driven out of their taxi plates, they're facing significant hardship, loss of homes," she said.

"And we've always said that with deregulation and reform that we need to make sure there's enough assistance, fair assistance to taxi plate owners."

Pressure from ride-sharing services

In Parliament yesterday, Mr Nalder painted grim picture of the heavy toll on taxis from the dual impact of a contracting state economy and increased competition from ride sharing services.

"It is evident that the values of Perth metropolitan plates have declined in the last 12 months reflecting a generally lower demand for taxi trips and a decreasing amount of time a taxi is engaged with a fare paying passenger," Mr Nalder said.

He also indicated pressure on the taxi industry had begun even before the October 2014 arrival of Uber.

Transport minister Dean Nalder concedes taxi patronage is declining. ( ABC News: Andrew O'Connor )

Mr Nalder said in 2012 there were 13.2 million taxi trips in Perth which declined slightly to 13.1 million trips in 2013.

In 2014, it dropped to 12.6 million trips, and then declined a further 15 per cent last year, a slump of 1.9 million trips.

Mr Nalder defended the Government's original assistance measures, including reducing taxi numbers by 20 per cent, and said the transition payment and hardship fund were set in light of those numbers.

"It was considered at the time that it was an appropriate reflection of what was happening in the marketplace," he said.

But this year, a price cut by Uber triggered a further cut in taxi trips of 17 per cent.

Despite acknowledging the impact on the industry, Mr Nalder made it clear the revised package would provide assistance, not compensation.

"I wish to reiterate that the Government is not making a compensation payout nor does it plan to buy back plates either compulsorily or on a voluntary basis," he said.

"The taxi sector is a viable and necessary part of the on-demand industry.

The Government is not taking away any right to own a taxi plate or the right to operate a business that is innovative, competitive and resilient."

The first phase of the Government's reforms take effect from July with minor regulatory changes, with the major reforms happening with legislative changes later this year.

Mr Nalder expects the new assistance package to be finalised before then.