Taxi fares are set to rise in Victoria, and those getting home after a big night out will face the biggest increases.

That taxi ride home after a big Friday or Saturday night out will soon cost a whole lot more in Victoria.

A new taxi fare system will take effect next month, and while fares will go up across the board it will particularly drive up the cost of a cab ride during the weekend’s busiest overnight periods.

Public Transport Minister Terry Mulder said the hike would provide more incentive for taxis to be on the road in peak times, while the broad-fare increases would boost returns for drivers and operators and help to lift industry standards.

“We want to make that we have well educated, well presented and incentivised drivers who are prepared to work when taxis are required,” Mr Mulder told reporters on Friday.

“And we want to make sure operators have a level of income that enables them to reinvest in the industry and to make sure that the vehicles they put out there are the best available – presentable, clean and well maintained.”

Mr Mulder said it was the most significant change to Victoria’s taxi fee structure in six years.

New flag fall, per kilometre and minute charges will apply for three distinct periods – day (9am-5pm), overnight (5pm-9am) and peak (10pm-4am overnight Friday and Saturday).

Late-night revellers across Melbourne can expect to pay around an extra $5.40 for a 5km ride home (total cost $19) during the peak, or an extra $20 for a 40km trip (total cost $98).

But for cab rides during the day, Mr Mulder said fare rises would be very modest.

“Daytime fares will only rise by little over $1 per trip, for trips of up to 40 kilometres,” he said.

The fare hike is part of broader reforms of the taxi industry, which will also lead to cab drivers receiving an increased slice of the fare rising from 50 per cent to 55 per cent from July 1.

Taxi Services Commission chair Graeme Samuel said the changes were about striking a balance between the interests of the industry, drivers and passengers.

“Passengers trying to get home late on Friday and Saturday nights will pay more, but will be better serviced by the availability of taxis,” Mr Samuel said.

The Victorian Taxi Association said it supported the changes.

However, the opposition said the reveller-targetting fare hike was in stark contrast to Labor’s plan to introduce 24-hour train and tram services on weekends.

“It is important that we make sure that our taxi drivers are better paid and that, I think, will lead to better services … but it is no replacement to all-night public transport,” said Labor leader Daniel Andrews.