The Panama City Taxi Fare Conundrum
Panama City, Panama
The tourist literature touts the cheap taxi fares within Panama City as one of the region´s best values.
Don´t you believe it.
Officially, the taxi fares are inexpensive. Hacks operate on a zone system. Crossing several zones only costs two, three or four dollars. Since Panama City isn´t that big, you should never have to pay more than a few singles for a ride.
But the taxi drivers take one look at your non-Panamanian mug and they quote two or three times the official price. They won´t negotiate much, because they have a powerful ally: the weather.
There´s nothing stopping you from standing on a corner and flagging down cabs until you find an honest driver. Nothing, except for the fact that in five minutes the heat and humidity will have you soaking through your underwear with sweat. So, if you don´t want to arrive at your destination looking like Michael Phelps after a hard day´s practice, you pay the ferryman.
Other factors prevent you from getting the official price. Panama City has no metro, only the wealthiest can afford a car, and only the poorest ride the intracity bus lines; everyone else uses taxis. Consequently, there´s not a lot of available cabs.
Panama City taxi rules allow a cabbie to pick up other passengers en route. You can sit down in an empty taxi and, before you know it, you´re squeezed between two strangers. Some of the cabbies understand travellers´ desire for a solitary ride, but they make you pay for the privilege.
And if you´re going anywhere near the Canal, take your negotiating hat off and surrender. No one wants to return from Panama without being able to say that they saw the Canal, and the cabbies know that. Regardless of the official rate, they want $25. As always, you´re free to stand on the corner of Via Argentina as long as you want searching for a lower fare to and from the Miraflores Locks. In addition to the sweat, watch out for the midday cloudbursts.
I blame the government. The zone system isn´t enforced. The cabbies have no fear that their licenses will be suspended or revoked if they gouge the gringo.
The government also warped the market by creating a standard $25 rate to or from the international airport -- a rate which is significantly higher than rates to the domestic airport or the national bus terminal. The $25 might make economic sense after factoring in distance, turnaround time, etc., but the principal lesson the drivers learned was ¨Tourists will pay $25 for a ride! Let´s try to charge $25 for everything!¨
If I were a Freakonomics type, I would tease some punchy, counter-intuitive truth from these observations. As it happens, the experience leaves me grizzled.
It´s not the absolute amounts that rankle. Being charged $5 for a $2 ride won´t break the bank.
What grates is the constant feeling of being ripped off every time I step into a Panama City taxi.
And that´s entirely a government creation.
If the government enforced the zoned fares, there would be no problem.
If there were no zoned taxi fares -- if the rates were entirely a product of free-market negotiation each time I haled a cab -- there would be no problem. If I felt I paid too much, I could haggle better terms next time.
But, by creating a zone system and declining to enforce it, the Panama City government has created a problem. I know for a fact that I´m being ripped off, and I feel powerless to do anything about it. That´s not how the taxis in a world-famous tourist destination should work.
Pictured: A taxi in the city of David, Panama.