Melbourne has a fleet of around 4000 taxis and about 15,000 taxi drivers. In 1994 the Victorian State Government introduced legislation that required all taxis to be a uniform yellow colour. In 2002 green-top taxis were introduced and are licensed to be used during busy periods and at special events.

The marketing and coordination functions of the fleet's management are controlled by a small number of competing taxi companies. The majority of taxis themselves are small businesses with smaller companies and individuals owning the majority of cars within the fleet. In some cases individual cars are operated by their owner yet the majority (60%) are operated by drivers who lease the cab from the owner. The conditions of these leasing agreements are not regulated by government and are negotiated on a commercial basis.

Most Indian taxi drivers lease their cab and typically earn a 50/50 split of fares with the owner. The standard taxi shift is 12 hours but, as some owners set monetary quotas in exchange for the right to use the car, drivers can work much longer hours in order to meet these quotas.

The industry is regulated by the Victorian Taxi Directorate who oversee licences and responds to complaints about individual taxis. In response to growing community concern over the roadworthyness of some taxis and a general perceived decline in service, local geographic knowledge and hygiene, the Directorate regularly conducts spot checks to ensure vehicles meet with standards and licences are current. New taxi drivers go through an intensive 120 hour training program before they can apply for a licence and, late in 2009, the State Government announced an initiative that would require all new taxi drivers to sit both an English test and a local landmarks test before being granted a taxi drivers licence.

In response to a number of attacks on taxi drivers, and after a large protest by the Indian taxi driving community in 2008, mandatory pre-paid fares have been introduced for travel between the hours of 10 pm and 5 am.