It is about time. Uber and other ride sharing have been given the legal green light in Victoria, which must be welcomed by voters.

Uber was not going anywhere, making it illegal would have infuriated punters.

But if there is one thing voters do hate, it is a new tax.

The new $2 levy on all taxi and ride-sharing trips is a gamble – it is double what passengers in Sydney pay.

The government hopes that voters will understand the money will be used to help the taxi industry transition and help investors get some relief – up to $100,000 per taxi license.

Labor also risks backlash over the buy back. But argues that given taxis are heavily regulated by the state, investors deserve relief if government so dramatically moves the goal posts.

And the decision to impose $2 opens Labor up to attack that it is slugging Victorians with a new tax, something it promised not to do.

Cleverly it has put the onus for the levy collection onto operators, who will have to find ways to make trips affordable in a highly competitive market.

Premier Daniel Andrews and Transport Minister Jacinta Allan have sold the radical overhaul as a win for punters by providing a more competitive market.

The Andrews Labor government had little choice but to legalise ride-sharing – the horse had bolted. The popular service has been operating for more than two years, with punters voting with their feet.

But unlike other state governments, Victoria took its time to build a framework; something it was often criticised for as one-by-one other jurisdictions moved.

"Why the dithering?", many asked.

"Proper reform takes time," Labor responded.

But the Sex Party moved its own bill to legalise the service, and Labor risked losing control of the ride-sharing agenda.

So now we have a massive overhaul, one that aims to tackle future problems for the taxi industry – such as the decline in rank and hail services – by creating an "agnostic" law that treats all commercial ride services the same.

The challenge is for the taxi industry is to evolve to meet passengers' higher expectations and to remain relevant in a highly competitive market.

Uber and other ride-sharing will also have to learn to operate under Victorian law.

There will be major challenges along the way; critically how will the important role taxis play transporting Victoria's disabled be affected.

Every year taxis provide 750,000 subsidised trips for people with a disability, the government has set aside $25 million to support disability services and set up a new commissioner to ensure their specific needs are looked after.

Ride-sharing had to be regulated, after taking its time – much to the chagrin of the industry and users – reform has arrived, only time will tell if all passengers will be better off.