Should taxis be considered public transit?

Norm Van Eeden Petersman
Member Question from Steinbach, Manitoba's Chris Krahn: 
We've recently seen a surge of taxi companies start operating in my city when there were none just a few years ago. These taxis are the only method of transportation available to people who do not own a car or are unable to drive. When pressed about transit issues in our area during the last municipal election, our city councillors insisted that we do not have the population to support any kind of transit system and that these taxis work just fine for people who cannot drive.
What are generally the first iterative steps we could take to encourage safe and accessible walking or cycling? I'm worried that depending on taxis as our sole form of transit will result in unnecessary sprawl as our city grows and expands which could make walkability impossible.
Here's part of an answer to this question from Office Hours with Chuck Marohn



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