It is easy to get around Reykjavík by bicycle, if you can deal with sometimes strong headwinds and a few hills. There are not many dedicated bicycle paths and so most cycling is done on the street or on the sidewalk both are legal. When cycling on the street you must obey the same traffic rules as cars. When cycling on the sidewalk it's important to be considerate of people who are walking there, they have the right of way.
Where there are specially marked paths for cyclists these are frequently shared with pedestrians, with a painted white line indicating the division between the two forms of transport. In these cases the narrower section is the bicycle path. Dedicated bicycle paths are a new phenomenon in Reykjavík but their number is increasing every year. These mostly link the city centre with the suburbs.
Bicycles can be rented at the following locations:
Bikecompany offers guided bike tours around Reykjavik in varied degree of difficulty.They also operate one of the largest bike rentals in Reykjavik at various locations. Flexible opening hours and they even have tandem bikes for rentals.
Scooters allow you to explore Reykjavik on your own terms or just roll around downtown.
Reykjavik Bike Tours
Bicycle rental - electric bikes, city bikes, mountain bikes, children's bikes, trailers, connecting bikes, tandems. Scheduled and private bike tours available all year. Open around Christmas and New Year - see website. Day tours, i.e. Golden circle and more. Private tours of all sorts available. Bicycle delivery to hotels and guesthouses available upon request - fee may apply.
The main taxi companies in Reykjavík are Hreyfill-Bæjarleiðir +354 588 5522, BSR +354 561 0000 and Borgarleiðir +354 422 2222. All taxis are metered and most are very clean and comfortable, but be warned that travelling by taxi is one of the most expensive ways of getting around Reykjavík. There is a start fee of 600-700 kr. and a fee of 200-400 kr. per kilometer. Taking a taxi is, however, the best way to get home after a night on the town. Paying by card is not a problem, nor is splitting the bill. You can either order a taxi by phone or find one at a taxi rank, of which there are several in the city. In central Reykjavík there is one rank by Lækjargata and another by Hallgrímskirkja.
Driving in Reykjavík is the preferred method for most residents there. As a tourist though, you should be able to manage without a car if you're only staying in the city. Driving is recommended though for travel outside of Reykjavík and its suburbs. Note that many streets in central Reykjavík are one-way only and some of them are closed to cars in good weather.
Compared to most other modern European cities, Reykjavík actually manages to have a reasonable number of parking spaces, especially for a city that boasts the most cars per capita in the world. If you're in the centre and can't find a place to park, there are big parking lots by the harbour and in front of Kolaportið the flea market. Parking spaces in the city centre generally have parking meters charging between 80 and 150 kr. per hour. The city recently introduced a new type of meters and you can now pay by card if you don't have coins on you. The fine for not paying is 2,400 kr.
Walking in Reykjavík is highly recommended, as many attractions are within walking distance from the hotel area. The city is very beautiful, and the sidewalk and pathway system is first-rate. Reykjavík drivers are in general very friendly, and will sometimes stop for you even when there is no crossing facility.
Unknown to many tourists a very long and scenic pathway for walking and cycling circles almost the whole city. A good starting point is anywhere where the city touches the sea. The path leads by an outdoor swimming pool, a sandy beach, a golf course, and a salmon river.
Reykjavík has a public bus system that is clean and reliable, called Strætó (http://www.straeto.is/english). Single rides cost 400 kr. for some very odd reason, the driver cannot give any change. If you need to switch buses to get to your final destination, ask the driver for a transfer ticket skiptimiði, which is valid for the next 75 minutes on any bus.
If you're staying outside the city centre it may be best best to get a Reykjavík Welcome Card, which allows unlimited access to the buses, along with free access to several museums, some discounts and free internet at the hostel. The 'Welcome' cards are available at the Tourist Information Center by Ingólfstorg, and also at some hotels. A one-day card costs 2900 kr., two days costs 3600 kr., and three days costs 4200 kr March 2013. Other possibilities include buying 11 tickets for 3,000 kr., a 1-day pass at 800 kr. or a 3-day pass at 2,000 kr. If you're staying for longer you can buy a long-term pass: A green pass lasts a month and costs 9,300 kr., a red pass is for three months and costs 21,000 and a blue pass lasts 9 months and costs 49,900.
Hlemmur and Lækjartorg are the main bus interchanges in central Reykjavík, with buses that can take you to any part of the city. The Strætó system has buses going all the way east to Selfoss and north to Akranes, the former leaving from Mjódd and the latter from Háholt. Both of these stations can be reached from Hlemmur.
Note that while most areas of Reykjavík and the neighboring towns are accessible by bus, the last buses leave around 11pm and the city has no night buses.