The Consumer Action Law Centre's submission to the Taxi Industry Inquiry called for the Public Transport Ombudsman to take over complaints about taxis. In the past five years complaints increased by about one third.

But only a third of all complaints have enough evidence to back them up, said the taxi industry, which defends the current complaints process.

CALC policy and campaigns director Gerard Brody said an industry-based scheme would help resolve a complaint sooner.

Complaints about taxis increased from 1972 complaints in the 2006/2007 financial year to 3456 in the 2010/2011 financial year.

VTD spokesman Eugene Dolgikh said more than one third of those complaints could not be substantiated due to a lack of evidence.

Mr Brody said the approach wasn't good enough. "To tell people they don't have evidence will not resolve consumer concerns with the taxi industry," Mr Brody said.

When evidence is provided the Victorian Taxi Directorate has the power to reprimand drivers, issue an infringement notice or remove a driver's accreditation.

Victorian Taxi Association's spokesman David Samuel said there were not enough complaints to justify a shift of complaints to the Public Transport Ombudsman and that it would only further complicate the process.

"One of the biggest issues is complaints are lost in a vacuum... we would like to see them dealt with from start to finish," he said.

The inquiry is expected to make recommendations to the government next March.