Taxi driver Watcharachai Paka, 28, from Trang, told police that picked up a Chinese couple and their young son and was taking them to their five-star resort in Cherng Talay in the Laguna resort complex.
They had nearly reached their destination at about 9:15pm when he could smell burning and then could see flames coming out from under the bonnet.
All four got out of the taxi quickly, with no-one injured, Mr Watcharachai explained.
Mr Watcharachai attempted to douse the flames with a fire extinguisher, to no avail.
Firefighters soon arrived on the scene and put out the fire within about 15 minutes, but by then the car had been gutted by the fire.
Police said they were continuing their investigation.