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Car rentals are widely available in Montreal, but unless you're heading somewhere outside of the city limits, they are not particularly necessary, and indeed, parking can be expensive and difficult to find. Plus, in the summer, many streets are blocked off for street fairs, sidewalk sales, events such as the Jazz Festival or the fireworks competition, and even all summer long such as Ste-Catherine in the Village.
Instead, most people will choose public transportation, since the city's métro (subway) and bus system can get you to most well-visited and tourist areas, and is clean, efficient, safe, and reasonably priced. For more information on public transit, see the Montreal Public Transportation page, www.stm.info and TourbyTransit-Montreal which has detailed public transit and walking directions to most Montreal attractions. Note that only 7 métro stations are accessible by wheelchair, although there are other transit options for those with mobility issues: see http://www.stm.info/en/info/network-a... for info on low-floor busses and the métro, or the http://www.stm.info/en/paratransit paratransit section which is available to visitors although read the section carefully or phone to make sure you are eligible.
Montreal is a compact and very walkable city, so expect to walk a lot! Visitors to Montreal are often impressed by the "underground city" -- a series of tunnels and malls that connect over 80% of the office space downtown which is a godsend in the long, cold winter months or the hot muggy summer heat. See a .pdf map of the underground city.
Taxi service is also efficient and reasonable in Montreal at all hours. Taxis come in all shapes, sizes, and colours (not just yellow), fares are metered and posted on the window of taxi and do not increase at night. A taxi cab can normally hold 4 people -- 3 in the back, 1 in the front passenger's seat, although larger mini-van taxis exist. Tipping of 10%-15% is customary although not mandatory. There are 420 taxi stands and 4,445 taxi cabs in Montreal, so finding one is normally very easy; technically, you are not allowed to hail a cab within 60 meters (around half a block) of a stand, and you must take the first taxi at the stand. If you are outside of downtown, it may be more convenient to phone a cab company directly. See TA's Taxis and Rental Cars page for more information including fares.
As of 2009, Montreal also has the Bixi bike sharing system, which is very convenient for exploring the inner neighbourhoods and zipping around town. The price structure is complicated and designed for short hops around the city, not for long all-day rides: you pay an initial fee, and after that you can take any bike and if you dock it at any station before 30 minutes, the ride is free; after that, it becomes increasingly expensive the longer you go before docking it, See www.bixi.com for more info. A number of private bike rental places offer bikes that are lighter, more your size, and are more suited to long rides along the bike path, for example.
If you want a trip on the water, there are a few possibilities: a summertime maritime shuttle can take you (and your bike) from the Old Port to the Islands or to Longueuil. As well, there are a variety of tour boats, including the bateau-mouche day tour or dinner cruise, the amphibus land/water tour or perhaps the most exciting Lachine rapids ride, which takes tourists on a jet boat up the river into the once-impassable Lachine rapids -- see Jet Boating or Rafting Montréal.