RIDE-sharing giant Uber is urging the McGowan Government to halve a proposed passenger levy that will be used to fund taxi buybacks, saying the current plan will raise far more than predicted.

With the Government set to introduce legislation into Parliament within months for its “on-demand transport” reforms, Uber is leading the charge for a compromise on a proposed $120 million levy at the centre of the shake-up.

Under the plans, a four-year, 10 per cent tax would be levied on the total fare revenue generated by taxi and ride-sharing companies such as Uber and be used to fund plate buybacks starting at $100,000.

However, Uber says estimates of the revenue to be raised at the 10 per cent rate are based on out-dated and overly conservative data and assumptions and the measure will in fact collect significantly more money than anticipated.

Kate Debenham, Uber’s State manager, said since the inception of the ride-sharing service and others like it, the “on-demand” transport market including taxies had grown up to 60 per cent as prices came down and people took more trips.

Ms Debenham also noted the rate proposed by the Government was the highest in Australia, and a 5 per cent levy would generate the funds required for the scheme at less cost to the travelling public and broader industry.

She said if there was a shortfall in collections, Uber would not oppose a 10 per cent rate provided it was approved by the Economic Regulation Authority.

But Transport Minister Rita Saffioti said the levy would remain at 10 per cent and called on Uber to absorb the costs.

“Halving the levy would simply double the amount of time that the levy needs to be in place,” she said. “Once the required revenue is raised, the levy will cease. Ride share operators such as Uber currently take up to 27 per cent commission from drivers. We believe there is some capacity to absorb the temporary levy so it does not fully impact consumers.”

Uber said a 10 per cent surcharge was twice the cost of anywhere else in the country and that more than 50,000 people who regularly use its service could face increases of about $2 a ride because the costs “cannot be absorbed”.