Western Australia's taxi industry has been described as a "public policy scandal" by the co-author of a review into the system.

Professor David Cousins and Professor Allan Fels, both leading economists, made 34 recommendations, mainly to the Government, in their report commissioned by the RAC.

The report recommended lifting all restrictions on the number of licences.

Professor Cousins said they had not recommended full deregulation, but there were strong pressures for further reform.

The key reform issue was the restriction on the number of licences, which can cost $300,000 each.

"It's unfair and inefficient," Professor Cousins said.

"In another context, I said it's a public policy scandal, and that's what I think it is."

He said the restrictions increased fares by about 16 per cent, or an average $3.30 per trip.

App services result of poor performance: report co-author

Professor Cousins described the emergence of new technology, such as app-based services like Uber, as a "market industry response to poor performance, generally".

The report recommended small charter services, such as Uber, be subject to registration and insurance requirements.

However, it also said minimum fee requirements and restrictions on vehicle types should be abandoned.

Uber allows customers to book vehicles using their smartphones by providing their credit card details and other personal information.

Taxi drivers regard Uber as a major threat to their business and the Taxi Council of WA has labelled it an unlicensed and unlawful service with public safety issues.

Professor Cousins said the value of taxi plates could fall by between $100,000 and $150,000 if licence restrictions were removed.

The review recommended a voluntary government buyback scheme for taxi plates, based on the $18,000 annual cost of leasing them.

It also said fares should stay the same while the industry adjusted to the removal of licence restrictions.

In July, the Economic Regulation Authority (ERA) recommended deregulation of the taxi industry, by lifting restrictions on the number of plates and dumping rules preventing competition from small charter operators.

The ERA estimated customers would be $70 million better off from reductions in fares and waiting times were also expected to drop.

Transport Minister Dean Nalder has previously said deregulation of the taxi industry was inevitable.

Warning issued against flooding market

The Taxi Council of WA has acknowledged services must improve, but it was strongly opposed to deregulation.

Taxi Council chairman Kevin Foley defended the industry's performance, saying services had improved greatly since the peak mining boom years in Western Australia.

"During the peak times, which is Friday and Saturday night, we're running at 93.7 per cent efficiency," he said.

"Everyone's getting a cab within 20 minutes on a Friday and Saturday night."

He argued against lifting restrictions.

"If you don't control how much rolling stock you've got out on the road when the work's not there, the driver will starve and get out of the industry," he said.

"So that's the big trick, to try and control the service at the same as a decent return to the driver's efforts."