In a challenge to ridesharing services, Melbourne taxi companies will be allowed to set their own fares if proposed legislation reforms are passed in Parliament today.

The Andrews government hopes the bill will encourage better services, cheaper fares and give Victorian customers more choice. By allowing taxi companies to set their own fares, the government believes competition will drive down prices for consumers.

Taxis would also be allowed to employ surge pricing during busy periods. Georgia Nicholls, chief executive of the Victorian Taxi Association, told 3AW the government will put a cap on fares to stop price gouging during any major public delay, such as a systemic public transport failure.

The bill also proposes protections for riders to make sure prices aren’t unfairly hiked – providers will need to give passengers a fixed fare cost or estimate before the trip begins. If the passenger doesn’t agree with the fare, they can refuse service. If for any reason these requirements aren’t met, drivers could lose their accreditation. Taxis will also be required to install safety cameras.

It will also remove annual taxi licensing fees, replacing them with a different vehicle registration process.

If passed, the reforms will be implemented in 2018.

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