NSW rideshare and taxi passengers will pay levies for another two years as taxi licence owners move a step closer to securing further compensation.
The government has outlined its plan to deliver a further $500 million to licence holders, on top of $145 million in payments already doled out.
The compensation for taxi licence owners was in response to the rise of rideshare apps such as Uber that disrupted the industry despite not being strictly legal when the services were embraced by the market.
Rideshare and taxi passengers pay a one-dollar Passenger Service Levy (PSL) in NSW to fund compensation for taxi licence holders which will be extended a further two years until June 2029.
The scheme was introduced in 2018 to fund industry adjustment packages up to $250 million.
As of June, it had collected more than $259 million, according to Revenue NSW data.
Uber is disappointed by the PSL extension, calling it "a tax paid by consumers when they take any taxi or rideshare trip".
"With this decision, the government has effectively codified a tax on all point-to-point transport in NSW," an Uber spokesperson told AAP on Thursday.
"This is a frustrating outcome for consumers and we will continue to lobby the NSW government to legislate an end date for this levy."
Taxi licence owners in Sydney could claim up to $600,000, made up of $100,000 for each licence with a six-licence cap.
Outside the capital, owners will be able to secure $130,000 for each licence, with no limit on the number, Treasurer Matt Kean said on Wednesday.
The government needs to pass legislation through parliament to remove taxi licence supply restrictions before the compensation comes online.
"This will create a level playing field across the sector, freeing the taxi industry to better compete, while driving improved and more innovative services for customers," Mr Kean said.
Transport Minister David Elliott said people in the taxi industry had suffered financially and emotionally in recent years.
"We have acted to support them by offering financial assistance which surpasses the package proposed to the industry in September last year," he said.
Mr Elliott told budget estimates earlier this month a unique compensation package was needed for taxis.
He accepted other industries had been forced to evolve without compensation.
"Not one of them that has been put to me has had highly regulated and expensive licences and registration plates sent to them and their families every year," Mr Elliott said.
"I still don't believe that any commuter or Uber user begrudges spending an extra dollar to put into a compensation pack. I haven't met that person yet."
Regional Transport Minister Sam Farraway said rideshare services weren't available in regional areas as they were in larger cities.
The compensation package will help regional taxi businesses move forward and continue providing vitally important transport options, he said.
The government plans to totally deregulate the point-to-point transport industry with legislation to be introduced before the end of the year.
The money will begin flowing next year if the package passes.
The NSW Taxi Council said it was not in a position to comment on Thursday as it needed time to understand the proposal and its implications.
Rideshare operator DiDi opted not to comment on the PSL extension, while rival Ola did not respond by the advised deadline.