This paper explores the causes of, and evaluates possible remedies for, the decline of public transport in Melbourne. Travel patterns in urban areas are characterised by diversity: origins and destinations are dispersed and travel occurs throughout the day. Traditional forms of public transport, oriented to peak period, central city commuters, have had difficulty coping with this diversity. The currently popular response to this problem in Australia is based on the 'economic rationalists' remedies of privatisation and deregulation. But other cities have responded with the opposite policies, planning and coordination of services. This exploration of the two approaches is carried out through a comparison of public transport policy in Melbourne, where patronage has declined at world-beating rates in the last four decades, with Toronto, which has been much more successful. The reason for the contrasting patronage performances is found to lie in the different policies pursued in the two cities. These differences date from decisions taken in both cities in response to crises in public transport policy following the first world war and again in the 1950s. In Toronto, services have been planned and integrated by a public monopoly; policy in Melbourne has been market-driven, and based around competition and extensive private sector involvement. Toronto's centrally planned system has proven the more flexible in car ownership. While public transport operators in Melbourne have competed with one another, Toronto's single operator has competed with the car.