Abstract
THE ARTICLE EXAMINES THE TAXICAB INDUSTRY TO DETERMINE ITS ABILITY TO PROVIDE A PARTIAL SOLUTION TO URBAN TRANSPORT PROBLEMS. THIS WILL CRITICALLY DEPEND ON ITS LONG-TERM COST AND OPERATING CHARACTERISTICS. THE EXAMPLE STUDIED IS THAT OF THE TAXICAB INDUSTRY IN MELBOURNE. THE INDUSTRY HAS SURVIVED AND MAY BE ABLE TO EXPAND BECAUSE IT IS SAID THAT THERE HAS BEEN A RELATIVE DECLINE IN THE QUALITY AND REAL WAGES OF DRIVERS, AND IN THE PRICES OF NEW VEHICLES. FURTHER RESEARCH INTO THE RELATIONSHIPS BETWEEN LABOUR COSTS AND QUALITY, AND THE EFFECT ON THESE OF COST INCREASES IN OTHER SECTORS WILL PROVIDE USEFUL INFORMATION FOR DETERMINING THE INDUSTRY'S FUTURE.