Dr McGirr also warned that drivers and passengers alike could be worse off in regional areas under further proposed reforms.

The NSW government removed the limit on the number of taxi licence plates on issue in 2015 in a deregulation move designed to reduce consumer costs and better align the number of taxis with passenger demand.

The move, combined with legalising ridesharing services such as Uber, saw taxi plates plummet in value.

"In my electorate I have heard heartbreaking accounts of hardworking men and women who invested their life savings or embarked on careful borrowing to buy a taxi plate, confident right up to 2015 that they would have a secure investment or equity for their borrowing," Dr McGirr said.

"I speak of a couple who paid $400,000 for a taxi plate plus $20,000 in stamp duty and other costs.

"It was for their superannuation, for their retirement ... but, at the stroke of a pen when rideshare was legalised at the end of 2015, the Government reduced that investment to nothing," he said.

Dr McGirr said a "pittance" of $20,000 had been offered as compensation to taxi plate holders, which was then reduced by half from taxes.

A former Wagga taxi plate owner, who asked not to be named, agreed with Dr McGirr that changes to the industry can caused him a financial loss.

"When I couldn't find someone to drive the taxi, I drove it myself because of the money I had invested," he said.

Dr McGirr also told Parliament that further planned reforms to abolish taxi plates for individual regions and instead issue yearly licences to operate anywhere in the state would create more problems.

"Anyone who has a primary loan on a taxi licence should be left with no net debt. Furthermore, there should be a level playing field for all point to point services operating in regional areas and there must be no loss of service in smaller towns because of a blanket market reform," Dr McGirr said.

Liberal Party Terrigal MP Adam Crouch responded to Dr McGirr and said the same concerns had been outlined to him.

"What is good for Sydney is not necessarily good for the regions ... I urge the Deputy Premier and the Government to look long and hard," he said.

"People have given up so much of their livelihood to provide a service to our regions, and do so every day, whether it be to drive wheelchair-accessible taxis, or just to get people home in a safe manner."

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