Taxis are everywhere in Panama, especially Panama City. They’re clearly marked and nearly always small Japanese cars. By law, taxis must be painted bright yellow. Fares are based either on a series of zones established by law or on long-established prices for particular routes. There are no metered taxis in Panama.

Taxis are cheap, and drivers do not expect a tip. Always ask for the price ahead of time, and clarify whether the price quoted is per person or the total amount.

Fares are typically based on a single person in a taxi, with a small surcharge added for each additional passenger. Taxis are often allowed to charge a bit more late at night, on Sunday, or during holidays.

It’s rare to pay more than US$2 or US$3 even for long rides in Panama City. Fares within other cities generally top out at US$1. Rides outside the cities are more negotiable and more expensive, though it’s rare to pay more than US$20 even for a long trip on bad roads. Most shouldn’t cost more than US$5–10.

In rural areas, the taxis are sometimes pickup trucks, occasionally converted into a kind of homemade minibus. These cooperativos are especially useful for travel on dirt or badly maintained roads. Some taxis running specific routes, especially the converted pickups, operate more like buses than taxis and charge by the head.

Taxis can be hired by the hour for tours, though few taxi drivers speak much English. This can be a good option for those who want to cover a lot of ground in a short amount of time and would like the driver to wait between stops. There are no set prices for this service, but expect to pay about US$7 an hour within Panama City, or considerably more for long trips. Again, agree on a price ahead of time and don’t pay until the end of the tour.

Taxi drivers throughout the country are usually honest, decent, hardworking folks. However, the chance of encountering an unscrupulous character goes up somewhat in the more touristy parts of town and around the posher hotels. I try to walk away from these areas before hailing a taxi.

In Panama City, so-called “tourist taxis” (they have “SET” license plates) hover around the more expensive hotels. These are larger, air-conditioned cars that are authorized to charge several times the going rate. It’s a pricey way to go, but may be of interest to those who want a more comfortable ride and the security of a lot more metal around them on the capital’s chaotic streets. Those who want the cheaper ride can just walk down to a main street and hail a cab.

Taxi drivers tend to drive fast and aggressively, and their cars have the dents to prove it. Buckle in and hope for the best. If a driver is making you uncomfortable, a firm but polite “despacio, por favor” (“slow, please”) should help a bit. If it doesn’t, demand to be let out and get another taxi.

It’s usually easy to find a cab night or day, and the international hailing sign of the raised arm works just fine. There are so many taxis eager for business that they often tap their horn at pedestrians to get their attention. This can get to be a little annoying if you’re just out for a walk, but it’s just an advertisement for business, not harassment.

At night, it can be worth calling for a radio taxi rather than waiting on the street. Many hotels, restaurants, and bars will be happy to call one for you.