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This case investigates the Hong Kong government’s decision making process in relation to the 2003 New Territories Taxi Fare Reduction Scheme. Under the scheme, the government first decided to cut fares for all New Territories taxis by 20%, and then re-instated the previous fare levels within one month because of protests by some taxi operators. The taxi industry in Hong Kong can be considered as a cartel consisting of three major groups of taxi operators, namely rentee-drivers, renter-owners and owner-drivers. Each group has its own interests and agenda regarding the fare structure and regulations. Operators who supported and opposed the fare concession scheme are identified, and discussions are generated to understand the dynamics of a highly regulated industry operating under a 'de facto' cartel.