Cab drivers have been given the green light to sue the Quebec government over its alleged inaction as Uber increasingly moves into their market.

A lawyer for the taxi drivers says if they win their claim, it could cost the province $1 billion to compensate drivers for lost revenues and a drop in the value of their taxi permits.

Quebec Superior Justice Mark Peacock said the case made by taxi drivers can proceed and be heard on its merits in a decision rendered Wednesday.

Drivers have accused the government of inaction while Uber's ride-hailing service moved into the province without being subject to the same rules imposed on taxis.

They say a government-sanctioned pilot project with Uber that began in October 2016 has further devalued their costly permits.

The class-action covers everyone who has held a taxi permit since October 2013.