I've been to Las Vegas enough times and used all of the common forms of ground transportation including taxi cabs, airport shuttles, rental cars, monorails, walking, and the city bus. In most of my trips I've used a combination of taxi rides, walking and the monorail.
On our latest trip to Vegas my wife and I had a rental car and it turned out to be a pretty good option for us. Usually in the past renting a car for me didn't seem as practical given the amount of travel I expected to do and the difficulty in navigating Vegas traffic. But we were lucky that traffic wasn't bad cause if traffic gets snarled on the strip then you can spend a long time sitting while the pedestrians flow past your idled car.
There are a variety of transportation choices in Vegas. Below I list the main alternatives and discuss some positives and downsides for each.
Rental cars in Vegas can be very practically priced. I did some quick searches on Hotwire for 4-5 day periods in July or September. I found car rental rates in the $20-$35 range per day including taxes and fees. Having a rental car can be a real convenience and give you freedom to do a lot of running around. But heavy traffic on the Strip can make driving there a gigantic pain. That reason alone is a good enough reason to avoid renting a car especially for someone unfamiliar with Vegas. Parking is usually free and pretty plentiful almost everywhere in Vegas. The garages near downtown seem to charge for parking now but you can often get validation at the casino. Personally I'd avoid valet parking or you'll end up paying a lot in tips and it can take a while for the valet to retrieve your car. Of course I'd avoid rental cars if you'll be drinking much and don't have a designated driver. If you're planning any day trips outside Vegas then getting a rental car makes even more sense. You can also get a rental car for 1 day to do your day trip and use other travel methods for the rest of your stay in the city.
There is airport shuttle service too and from McCarran airport to the major hotel locations. Shuttle service at McCarran costs $6-$8 per trip to strip and downtown hotels. Unfortunately the shuttle service can be a long tripwith the shuttle making multiple stops at various hotels to drop off people at each stop. If you have just 1 or 2 people then the shuttle can be the cheapest way to get to your hotel from the airport but for more people a taxi may be cheaper.
The Las Vegas Monorail
Free trams, shuttles and people movers
There are a number of free trams around Vegas. For example there is a small monorail that goes between Excalibur, Luxor
Walking is obviously free and also a nice way to work off some of the food consumed in Vegas buffets. However distances in Vegas can be deceiving and walking can talk a lot of time. The hotels are huge and take up a lot of space and tourist maps may not be to scale. It may look like going from The Venetian to Bellagio is just "a block away" but its actually a 2 mile round trip hike. If you consider that you're already probably walking a half mile round trip just to get through the large casino from your room to the outside you're probably already walking enough as it is. Wouldn't you rather spend your time on vacation having fun? Also consider that Vegas can get very hot in the summer so walking a mile in 100+ degree heat in the middle of the summer can be pretty tough on you. Another thing to be aware of when walking the strip are the vendors handing out sometimes pornographic pamphlets for adult oriented services. But if you're up for a hike and like the atmosphere of the Strip then you can't beat the price of walking.
The local mass transit in Vegas has regular bus service up and down the strip and to Fremont. They have a route named the Deuce that runs up and down the strip all the way to Fremont. Tickets for the Deuce route are $3. Or you can get a 24 hour all access pass for $7 or a 3 day all access pass for $15. You will have to wait for the bus to show up but they are pretty frequent. Buses can get crowded at peak times and you will have to know the routes and of course they only stop at the bus stops so you'll likely have to do some walking.
Other transportation I avoid
Town cars and limousines are pretty common in Vegas but neither are frugal options. There are some companies that rent out exotic cars or scooters but both are not practical and are more of a novelty entertainment option.
How I Choose What Transportation to Use
1. Figure out all the trips you're going to take.
2. Find cheapest non-rental car option for each trip based on your needs.
3. Add up cost of each of the trips. If rental car will not work for you then this is your answer.
4. If rental cars are an option then find cost of rental car for entire trip.
5. Compare cost of #3 and #4. If rental car is cheaper then get a rental car.
Lets look at some examples:
A family of four is going on a trip to Vegas for 4 days. You're going to stay at the Circus Circus and you'd like to see several of the strip hotels, visit the Fremont Street Experience and the Liberace museum. Spending one day walking up and down the strip is OK and you would take the bus to save money. (Please bear in mind the prices given here are just meant for example sake and your actual travel costs will vary.)
Round trip form airport. Taxi : $40, Shuttles : 4 x 2 x $6 = $48.
Round trip to Fremont. Taxi : $50, Bus : $3 x 2 x 4 = $24
Round trip to Liberace museum. Taxi : $40
Tour of Strip. Monorail tickets : 4 x $12 = $48, Bus : $7 x 4 = $28, Walking : free
All trips : Taxi : $40 + Bus : $24 + Taxi : $40 + walking free
Total cost = $104
Since there are four people you'll save money with the taxi instead of shuttles to get to and from the airport. Going to Fremont is cheaper by bus than taxi however since its a long trip and the bus is pretty cheap. The only practical option to get to the Liberace museum is the taxi. When you visit the strip walking is free and you're willing to do that to save money.
Rental car = $132 plus gasoline
In this comparison the rental car will run you around $30 more than the other options.
You and a friend are going to Vegas for 3 days. You'll spend most of your time gambling in your hotel the Luxor and you expect you'll be doing some drinking and a couple nightclub in other strip hotels. You don't plan any trips off the strip. You've got 3 trips. Round trip to and from the airport. 2 separate trips along the strip between casinos.
Round trip airport: Taxi : $30, Shuttle : $6 x 2 x 2 = $24.
2x Visit strip casino : Taxi : $20, Monorail : $5 x 2 x 2 : $20
The airport shuttle is cheaper round trip to the strip than a taxi for 2 people. For your visits of other strip casinos the taxi and monorail are about the same price so you choose to use taxis since they are a bit more convenient. Since you'll be doing some drinking you don't think rental cars would be a good idea.
Total costs = $24 + $20 + 20 = $64
Images by ChrisYunker and http2007