Not exactly the most cost-effective solution, but this does depend on the country you are in and on the currency. We advise against it in the large capitals of the modernised world but find it very affordable and easy to use in developing countries.
In Africa, a taxi for the day will cost just over twenty pounds and in Morocco you are looking at about the same amount, or 300 dirhams. As always, your negotiating skills will be your best tool. Keep in mind that it is highly advised to use the meter in big cities: taxis in Athens, Prague and Budapest are known for swindling tourists.
A recent ranking has named the taxis of London, Tokyo, Bangkok, Helsinki, Stockholm, Madrid, Singapore, Berlin and Dublin some of the best in the world. It may be interesting to note that those in Paris only rank at 16!
Beyond the money-saving aspect, pay close attention to the state of the vehicle. If the cost of a taxi is rather cheap in "exotic" countries, it is probably because the vehicles are worn out and run-down. We have seen Burkina Faso taxis without a floor, Indian taxis with the driver's door open while moving to make room for more passengers, Mexican taxis with the axle out of its shaft, Canadian taxis filled with newspapers to soak up the snow, Haitian taxis where the driver breaks with his feet (by opening the door), and even Bolivian taxis that have to be pushed after each stop!