As someone who has been going to Grand Cayman for 31 years, I must admit, I've been giving bad advice for the past few years. Since we have a car on the island, I've never really had to worry about transportation around the island. I've always told people to either rent a car, or more likely just grab taxis. I always thought this was the simplest and most affordable option.
I have been notified by someone who just returned from the island that they stumbled onto a bus taxi and found out that is the easiest and most affordable way to get around the island. So I took it upon myself to do some research and sure enough, it sounds pretty slick.
The Grand Cayman Bus Service began in 1998 and is a popular form of transportation for locals to get to and from work, but recently more and more tourists have been using it to get around the island in lieu of taxis. There are 38 mini buses that serve 8 routes. The most useful line extends from downtown Georgetown all the way along 7 Mile Beach.
There are bus stops all over the island, including one right in front of the condo office at Treasure Island (Sunset Cove) Condominiums. The route runs from 6:00 AM until Midnight in both directions. They look very similar to the regular taxis. They aren't like the city buses you are used to seeing in the U.S.
The real advantage is that they only charge $2.00 per person per trip regardless of your destination. If you want to go to Kirk's Supermarket just down the road, it will cost you $2.00. If you want to go all the way to the other end of the island to the Turtle Farm, still $2.00. With 38 minibuses servicing the island, the longest you will ever have to wait for one is about 5-7 minutes. Also, the real convenient thing is that you don't even have to be at a bus stop to get on one. If you see one driving down the road, just flag it down and they'll pick you up anywhere.
So next time you visit the Cayman Islands and decide to save money on renting a car, look for the taxi bus instead of the regular taxis and you will have some extra spending money for the good stuff, like rum punch and mudslides.
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