This report gives the results of work carried out to investigate, in broad terms, when and where the use of shared taxi services might be justified in light of cost considerations. The costs of operating taxis have been estimated and compared with those of operating stage carriage buses. Comparisons have been made in financial, resource* and fuel terms. The findings indicate that when public transport demands are low it may be more cost effective to provide a service with up to three shared taxis than with a bus. When demands are higher, and greater substitution ratios would be required to accommodate them, a bus represents the cheaper option. Similar relativities are noted in resource and fuel terms. Due to the nature of existing subsidy arrangements break-even fares for a shared taxi could be expected to be somewhat higher than those charged on conventional stage carriage buses. Cost considerations applicable to the operation of shared hire car services are likely to be broadly the same. (* Resource costs are costs that have had the effects of taxes and duties removed: they are a truer indication of the operating costs to society, as opposed to the financial operating costs to the service supplier.) (A)

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