There are many suggestions about the word Guagua
And the most common is I think what you wrote above,
The term guagua is used in Cuba, the Dominican Republic, Equatorial Guinea and Puerto Rico to refer to a city bus.
At the turn of the 20th century, the term referred to a horse-drawn wagon, and viajar de guagua meant `to ride for free.'
The same term is found in the Canary Islands, with identical meaning, and is used even in the most remote regions, on all seven islands.
Most analyses of Canary Spanish attribute this term to Cuban influence, brought back by returning islanders who had lived in Cuba.
The use of guagua in Equatorial Guinea (formerly Fernando Poo) has also been attributed to the Cuban exile and slave population which was sent to the island in the mid 1800's (González Echegaray 1959: 64).
The form, however, bears the characterstic shape of Guanche words, and the existence of this word among the Isleños of Louisiana, whose ancestors left the Canary Islands in the late 1700's, suggests the opposite route of transfer. The general absence of the word in the Spanish of Venezuela, where the Canary Island presence was also strong, adds to the confusion concerning the origins of guagua.
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