Yeah go for it. Think about it this way, if they also want to take it to the next level then great! no problems there.
If they don't and only see you as a good friend then your current friendship is on seriously uneven ground - you fancy them but they see you as just a 'nice guy/gal', and when they end up getting a partner that isn't you it will suck big time.
I was in this situation before and I ended up asking her out, she said no and our friendship nearly collapsed and is much weaker than it used to be. Yes it sucks and yes it hurts but I don't have any regrets, because before I was just living a charade and pretending to be just a friend when I was really falling for her (and still am, that's the worst bit). It also put some perspective on my life and that I was focusing far too much on one thing only.
It's all about risk in the end, do you like them enough to jeapordise your friendship with them for a shot at something greater?