Uber will soon be legal in Victoria after the government agreed to work on new laws with the Sex Party.
The ride-sharing service has been operating in the state since January 2013, but has been hovering in legal limbo.
Sex Party MP Fiona Patten proposed new laws to regulate Uber but has agreed to put her bill on hold while the government works out how to make them work.
"I would certainly like to see something substantial in early August," Ms Patten told reporters.
"I would hope to see it operating before Christmas."
Ms Patten said potential compensation for taxi licence-holders should be treated on a case-by-case basis, and she wanted a level playing field for all hire cars.
"That may mean deregulating the taxi industry to a certain extent, because they've been regulated because they've had a monopoly up until now," she said.
Public Transport Minister Jacinta Allan said the laws had to take into account how fast the hire car industry was developing.
"This is clearly an industry that is going through change, in part brought about by technology," she told reporters.
Ms Allan said Ms Patten's bill provided a way forward on some issues, but it needed more work to protect passenger safety and give the industry certainty.
The Greens said ride-sharing must support disabled passengers, with some wheelchair passengers reporting longer wait times for taxis since Uber started operating.
Ms Patten said regulating the industry means the rights of passengers with disabilities will be looked after.
Uber Victoria general manager Matt Denman said he looked forward to transparent discussions about how regulations would work.
"We will ensure (Ms Allan) hears from local drivers on what this reform means to them," he said.
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