Water taxi (WT) transport has been considered as an alternative solution to help reduce urban traffic congestion in Phnom Penh, Cambodia. This transportation is an alternative mode of travel that can save both time and money. Water taxi service was launched in April 2018 as an alternative public transport mode that allows users to save both time and cost. WT was suspended in March 2020 due to the spread of Covid-19 pandemic and was reopened in November 2021. The number of passengers using WT has been decreased and unstable. This paper examines current operational services of WT in Phnom Penh under condition of mixed water traffic with other vessels and ferries. It further presents the potential of water taxis for future development whether it shall be abandoned or sustained. A comprehensive literature review was conducted to gather insights from similar studies in other cities. Data on vessel traffic, water traffic volume, and peak hours were collected through on-site observations, GPS tracking of vessels and historical records. Family fishing boats were found to be high in longitudinal traffic, while medium-sized ferries were found to be high in transversal traffic. A micro-simulation tool was also used to analyze the operational services of WT in accordance with existing WT’s departure schedule. Results showed that WT has its potential as an alternative public transport mode for citizens, which helps to enhance overall mobility; thus, WT shall be sustained