Until relatively recently, buying into Sydney's taxi industry had been a far better investment on average than buying shares.

But the industry is under pressure on a number of fronts, including from the government regulator and the fast-growing ride-share service UberX, and licence plates, which can be leased but which are needed to drive a cab in Sydney, have started to feel the squeeze.

This year, the transfer value of a taxi licence in Sydney dropped to an average $375,000, the lowest level since 2008. Licence values reached a high of about $425,000 in 2011.

The state's pricing regulator, which is to release another report next week calling for t costs in the cab industry to be reduced more, said the return on buying a taxi licence plate in Sydney was more than 1.5 times as lucrative as the return of the stock market in the decade to 2012.

The growth of the value of taxi licences was concerning to the Independent Pricing and Regulatory Tribunal (IPART), because an increasing share of every taxi fare in Sydney was spent repaying the value of the licences.

But IPART has since started to release short-term taxi licences, helping put more cabs on the road in Sydney.

Roy Wakelin-King, the chief executive of the Taxi Council, said the drop in licence values had more to do with government policy than with competition from UberX, the ride-sharing service that enables regular motorists to offer taxi-like services.

"The principal cause of any downward pressure on taxi licence values has been an oversupply of licences that have been put into the market over the past four to five years, all of which have been in the post-GFC period," Mr Wakelin-King said.

"It is difficult to assess what the extent of the impact, if any, ride-sharing has had on licence values," he said.

Despite the perception that ownership of licence plates is concentrated among a number of dominant forces in the taxi industry, IPART figures show that the majority of plates are owned by people who own only one.

Tammy Younan and her husband Anthony own six taxi licences, accrued over the 25 years Anthony was a driver.

"We decided to lease the plates and that was our income," Mrs Younan said.

"We haven't really been checking the market value,  but only just recently with the talk about UberX we have become a bit concerned," she said.

The NSW government says UberX is illegal, but has struggled to minimise the growth of the service because of the difficulty of enforcement. Government officials need to book UberX services themselves to prove drivers are breaking the Passenger Transport Act.

"Several fines of thousands of dollars have already been issued for those breaking the law and enforcement operations and prosecutions are progressing," a Transport for NSW spokeswoman said.

Separately, IPART will release next week its draft recommendations on taxi fares to apply in Sydney from the middle of next year, and draft recommendations on how many annual taxi licences it should release.

Recent IPART reports have recommended holding taxi fares steady and increasing the number of annual licences released, to reduce the value of permanent taxi licences in the city.