This article is a contribution to ongoing studies of tax compliance by Australian taxi-cab operators and their drivers. The limits of the dominant academic literature and the industry-specific legislation on tax conformity will be assessed. The article’s core premise is that social and economic activities (legal and illicit) of cab drivers are embedded within unique networks of social relations. Cab drivers are subjected to a multitude of structural arrangements and informal social control mechanisms, which influence their attitudes and actions with regard to tax compliance. Regulatory initiatives towards diminishing non-compliance in the Australian taxi-cab industry continue to ignore the concept of mixed embeddedness and the interrelatedness between compliance rules, enforcement practices and broader legislative framework. It will be argued that changes to the employment status of Australian taxi drivers can produce a more expedient way for curtailing the deeply entrenched tax non-compliant modus operandi within this particular sector of Australia’s transport-services industry.