Taxis perform an important function inurban transport markets in both developed and developingcountries. Because of the perceived vulnerability ofpassengers to exploitation by operators, entry to the marketand fares have been tightly regulated in many industrializedcountries. This has typically produced high premium valuesfor licenses, implying some monopoly profit for operators atthe expense of users. Curiously, however, total deregulationhas often increased fares. This note considers the reasonsfor increased fares despite deregulation, the regulatoryoptions available, and the relevant considerations inapplying this experience to developing countries.