Reliable, inexpensive public transportation is alive and well in Nicaragua. If you walk down the side of a road, taxis will swarm to you like flies to honey. They are relatively inexpensive and allow you to dictate exactly where you want to go. However, my prefered mode of travel is to take one of the multitude of buses.
In Managua there are dozens of bus routes that will take you to within a block or two of wherever you need to go, that pass by every 5-15 minutes. It may take a bit to familiarize yourself with the routes, but once you do they work great.
The city route bus drivers are crazy. They drive their buses like sports cars, seriously. They remind me of the bus driver Otto from the Simpsons. They stop and start as abruptly as possible resulting in the passangers being thrown forward and back. Luckily there are usually so many more people squished onto the bus than there should be that there is plenty of padding.
There's more than one bus driver assigned to the same route. If one bus driver is faster or slower, than the one will end up laping the other. When this happens the drivers kick their craziness up a notch to compete for the passangers waiting at the stop. The buses will race each other through dense traffic. It isn't uncommon for them to cut each other off sharply--barely avoiding accident after accident. I'm pretty sure they do this in part to liven up their otherwise monotonous jobs.
They drivers don't ever come to a complete stop at the bus "stops" unless there are tons of people waiting. They just slow down enough for the people to jump on. There are handle bars next to the side doors and the back door (all valid entrances/exits) to hang onto if the bus rockets off again before you're fully inside.
They don't ever close the doors on the buses; a closed door would cut down on efficiency and even the number of passanger that can be crammed onto a bus. Often there will be so many people on a bus that we you jump onto one you won't be able to get inside. You'll just have a foot on the steps and a hand on the rail for your ride.
Now that I've paited the picture I'd like to talk about my favorite people on these buses: the bus-monkies. These are the guys that are allways hanging on the extreme outside of the bus that hop on and off the bus at each "stop" to hurry new passanger on and off the bus. They are also the guys that collect the bus fare.
These guys amaze me. With as many people as jump on and off the buses and as quickly as the buses zoom from stop to stop I can't figure how they are able to collect the bus fare from each passanger in the time alloted. It wouldn't be as amazing if each person carried exact change, but it seems that most people don't.
The first time I noticed this astounding feet I had climbed onto a bus with about 12 other people and ended up squished in the aisle several feet from the door. I was crammed in tight with a tangle of people all around me. A few moments after the bus started moving a hand appeared in front of my face from between the web of humanity around me. I placed a five cordoba note into the disembodied hand and it disappeared from my view. A few moments later the hand reappeared with my exact change.
Right after that we reached another stop and a large group of people surged around me and off the bus. How could he have gotten to everyone in time? I've tested this many times with different denominations (C$10, C$20, etc). I also tried going from one stop to the very next stop; they were allways able to find me through the mass of people with the correct change in time. I don't think I'd be able to find all of the passangers once they borded--much less keep track of them all and process the change that quickly. These guys have my undying respect.
All of the buses tend to have fancy paint jobs and tassles and personalized horns, but the cross country buses tend to be more "pimped out" than the city route buses. It's fun to see the city to city buses lined up at their jump-off points (usually at a mercado). These buses are almost all converted old yellow school buses. Of course, they are rarely yellow anymore. These buses also love to play music 'a todo volumen' whenever they can (meaning allmost constantly). The resulting cacophony at the mercado is almost hypnotic.
The bus trip experience itself from town to town is flavored with people selling gum, peanuts, fried yucha strips, sliced unripened mango with salt, enchiladas, fruit drinks, and probably serveral other things that I've forgotten. There are also usually some kids begging for money; some of them have a really good sales pitch. Oh, and let's not forget the occasional preacher who will take advantage of an audience that can't excape his sales pitch, or the snake-oil salesmen with the same idea.
In order to sample the true Nicaraguan experience you're got to try this at least once. Personally, I can't imagine a mode of travel more entertaining. Plus, riding a bus gives you a chance to meet new people, and let's face it, as beautiful as Nicaragua is, her people are her best attribute.