The traffic is not bad - certainly not as bad as New York. The subway system is good and only costs 3 pesos (I think) or around 25 US cents to go anywhere. There is also a MetroBus system that uses dedicated bus lanes to avoid traffic. If all else fails cabs are easy to find and you shouldn't pay more than 50 pesos (4 USD) to get virtually anywhere in the central tourist areas.
If you do your research on how to get to places, the subway is pretty good. and goes most places and is really cheap. most busses are harder imo, because not all of them have easily determined routes unless you know the area, and you have to tell them where youre gonna get off. The trams and Metrobusses are good though.
Id try to stay away from transport of all kinds at busy peaks. Subways are really busy after 6pm, and the roads are at a standstill with some crazy drivers.Edited: 13 November 2011, 06:24
Just returned yesterday from a week in Mexico City. We only used Taxis twice- from airport to hotel and from hotel to airport. After that, we used the metro and walked everywhere! The Metro is easy to use and will get you anywhere in the city. It is 3 pesos. Just buy a ticket and then catch the line that takes you where you want to go. No need to specify to the ticket people where you are going. We rode the metro at all hours and never had any problems getting on it - yes there were times is was REALLY crowded, but we survived and no one gave us troubles.
Where you are staying you can walk easily to Centro Historico. We stayed 3 blocks behind the Metroplitan Cathedral and walked almost daily to the Palace of fine arts- as the 5 de Mayo street is a pedestrian walk way (no cars!!) and has lots of resturaunts, bars and entertainment that is very safe. It goes from the Zocalo all the way to the Palace of Fine arts. Everything else, you can take the Metro.
The traffic is REALLY bad, so I wouldn't take a bus or taxi unless you have to. The couple times we ventured out to Taxco and Puebla in a car, we were stuck in horrendous traffic on the way back into town each time.
Have fun, it is a really neat place.
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