Although they work on a meter they can at times be 'creative' so it is always worth checking what the fare will be before setting off. As a guide, a 2 to 3 mile journey would be approximately £3.
The most inexpensive way of getting around are the 'aluguers' that are easily identified and drive around town picking up passengers. Often overloaded with people and packages, you simply shout when you want to get off. Watch the time as generally 'aluguers' do not operate in the evenings.
Most hotels offer a car hire facility but roads are poor and quite bumpy outside the main towns with little signage so we advise you use taxis or 'aluguers'.