Victoria's commercial passenger vehicle industry is broken and the damage of unfair competition and regulatory reform needs to be addressed, according to Commercial Passenger Vehicle Association of Australia (CPVAA) president André Baruch.

Appearing before the Victorian Government Economy and Infrastructure Committee on Wednesday Mr Baruch said compensation for all participants had to recognise that property was destroyed as a result of the reform legilsation.

"Before we can move forward we have to repair the past," he said.

"The current system that valued a second licence at half the price of the first is just ridiculous."

Mr Baruch said no-one would accept such a compensation deal on any other form of property.

"If you owned two identical townhouses in a street and the Government confiscated them and paid different compensation for each, you would not be happy," he said.

Mr Baruch also addressed the association’s concerns with safety and compliance across the industry. 

"The CPVAA believes every Victorian commercial passenger vehicle should have an annual roadworthy certificate and proper commercial passenger vehicle insurance as a requirement for their licence ," he said.

Huge numbers of drivers have been flocking into the market since deregulation and this has led to an unsustainable industry where no-one is making a decent income.

"In 2015 there was a ratio of 1 CPV per 702 people, now with over 68,000 vehicles and some 98,000 registered drivers we find we have 1 vehicle per 91 people. An 8-fold increase in supply, but there has been nothing near that increase in demand," he said.

Oversupply has led to increased touting at the airport, in the city and at major events, and unsafe work practices, with drivers swapping between rideshare apps and booking service providers to get enough work. 

"We need strong legislative measures to ensure active management of driver fatigue," he said.

"The industry needs to be fixed because it’s an integral part of Victoria's public transport system, and right now it's a mess."