Service providers must understand customers’ preferences to improve public transportation market share. Indeed, most public transportation customer satisfaction literature has focused on developed countries, and there are considerable differences between the available modes and the expectations of public transportation users in developed and developing countries. Therefore, this study aims to assess service quality indicators and their impact on users' satisfaction in a shared taxi mode. In particular, the study focuses on Taxi Khattee (TK) in Iran, which runs on fixed routes without a fixed schedule, and its fleet is mainly comprised of sedan cars owned by multiple entities. TK carries about 13% of daily trips in the city of Tehran. An intercept paper and pencil survey was conducted, including 45 questions, 22 of which were related to passengers’ satisfaction and service quality. A Structural Equation Modeling (SEM) technique is utilized to model the perceived service quality and the contributing factors. The proposed model has 14 (observed) service attributes and five exogenous latent variables: Comfort, Safety and Security, Serviceability, Customer Service, and Information. Also, a second-order latent structure was used to describe the relationship between service quality and passenger satisfaction (modelled as an endogenous latent variable). The results show that the most important observed variables leading to customer satisfaction are the variables related to Comfort, such as onboard cleanliness and vehicle apparatus functionality, followed by onboard safety. These results demonstrate the difference between the TK mode to the previous research on the bus, train, and ferry modes in which service attributes such as travel time and punctuality were the most important factors. Also, the results indicate the absence of any significant impact of users’ socio-economic and demographic characteristics or their trip characteristics on the level of satisfaction.