Pol Capt Wipawan Wathanangoenthanong, a Muang police duty officer, said the incident occurred at about 10:15pm.
Pol Col Teerawat Liamsuwan, the Muang police chief, arrived at the scene shortly afterwards with forensic police and medical staff from Vachira Phuket Hospital to investigate.
They found Prakob Chuthong, 54, lying dead by the counter of a 24-hour car park service kiosk. He had been shot twice, once in the left side of the head and once in the left rib cage.
About 80 metres away in front of the bus terminal, another man was found lying on the ground in front of a taxi service stand, badly wounded. The man - identified later as Yod Sae Lee, 50 - was given CPR before being rushed to Vachira Phuket Hospital where he was pronounced dead.
Wian Iadchuthong, 60, the gunman, who appeared drunk, was still at the scene, waiting to surrender to the police.
An initial police investigation revealed the three were close colleagues at the workplace, but often engaged in heated verbal abuse over motorcycle taxi and taxi services at the bus terminal.
According to witnesses, before the shooting, Mr Wian was quietly drinking alone. After getting drunk, he walked to the counter of the car park service kiosk where Prakob was sitting and fired two shots from a 9mm gun at point-blank range, killing him instantly.
Mr Wian then ran towards Yod, who was sitting in front of the taxi service stand. On seeing Mr Wian charging at him with a gun, Yod ran away to one side of the terminal building, only to be intercepted by Mr Wian who had run around the other side of the building to catch him. Mr Wian fired five shots, hitting Yod once in the head, twice in the torso and twice in the legs. Seriously wounded, Yod was taken to Vachira Phuket Hospital where he later died.
Mr Wian, the gunman, allegedly told the police he had had a serious argument with the two men and decided to take their lives with the gun.