Uber could finally be legalised more than three years after it started operating in Melbourne.
A Sex Party bid to regulate ride-sharing will be debated in parliament on Wednesday, with the opposition coalition declaring support for it.
Premier Daniel Andrews wouldn't say if the government would support the bill, but said the state was "a step closer" to regulating Uber.
"Victorians are voting with their feet, they're using ride-sharing services," Mr Andrews told reporters on Tuesday.
"But regulating this industry, making it lawful, is not an easy task, it's quite a complex task."
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Sex Party MP Fiona Patten has been working on a private member's bill to regulate Uber and says she won't withdraw it to let the government take it over.
"I've spent most of this year developing this framework," she told reporters.
"I hope this provides a basis for the government to go forward and regulate ride sharing in Victoria."
Ms Patten would like to see Uber drivers pay licence fees similar to hire cars.
UberBLACK started in Melbourne in January 2013, with UberX following in April 2014.
Uber Victoria general manager Matt Denman hopes the government will support the bill.
"There has long been bipartisan support for reform and now there is a sensible bill before the parliament that the government can get behind," he told AAP.
Opposition Leader Matthew Guy said the government had failed to act for 18 months even though the taxi industry needed certainty and, potentially, compensation.
"We should look at a range of mechanisms, whether it's quarantining some of those licence fees, and buying some of those licences out," he told reporters.
Public Transport Minister Jacinta Allan wouldn't be drawn on how compensation for the taxi industry could work, but said she was speaking with Ms Patten about her proposal.
"There are a number of areas it doesn't touch on that a government bill would need to," Ms Allan said.
Mr Andrews said it was encouraging to see a number of ride-sharing operators in the market, but the state needed to ensure passengers were safe and protected.
