Credit cards and cabs: New device may make it easier for taxi passengers to pay with plastic
Author: Jon Hilkevitch
Gadgets to let riders pay with credit, debit cards from seat.
The refusal of some Chicago taxicab drivers to accept credit cards leads to hundreds of complaints to city officials each year, ranking third behind reckless driving and rude behavior, records show. And taxi industry executives say the aversion to plastic among cabdrivers is actually the No. 1 complaint they receive. "The biggest thing I've heard from the public is the driver doesn't want to accept credit cards," said Jeffrey Feldman, president of Taxi Medallion Management, LLC. But now, officials hope new touch-screen equipment being installed in the back seats of up to 2,600 Chicago taxicabs will help address the problem. The devices give passengers the option to swipe credit or debit cards instead of handing over the cards, or cash, to the driver. The TV-like screen presents a running tab during the trip and, at the end of the ride, an itemized bill generated by the cab meter, including any surcharges and tolls. It also lets customers add a tip onto their charge card. The screen displays suggested gratuities corresponding to rates of 15 percent, 20 percent and 25 percent. The customer can instead use a keypad to enter a different tip amount, or provide a cash tip if desired. The technology will likely take away a ploy carried out by unscrupulous drivers -- a minority among the city's 15,000 taxi drivers -- who pretend the credit-card processing machine in the front of their cab is broken. That con game was attempted against your Getting Around reporter recently on a $60 ride home from Midway Airport. Miraculously (or not), the driver was able to "fix" the credit card machine when his unfazed customer simply refused to pony up cash. Driving a taxi is a tough way to scratch out a living. It explains why some drivers attempt to demand cash from their customers to avoid losing the 5 percent that credit card companies skim off the top of each fare transaction. There's another benefit to the back-seat displays. The touch-screen computers, equipped with Google Maps software, enable passengers to monitor their trip from pickup to drop-off. The mapping system tracks each cab trip and can be used as a navigation tool by passengers, making it obvious if a cabbie intentionally takes a longer route for no reason other than to inflate the fare. The trick falls under the heading of cab overcharges, which generated more than 600 complaints to the city in 2008. Meanwhile, fare transactions using the swipe-card technology are processed in three seconds on average, according to Creative Mobile Technologies, a New York-based company that produced the touch-screen equipment for taxis in New York City, Boston and now Chicago. "Customers love swiping the credit card because it's fast and easy, and sometimes the tips are better," said Amadou Barry, 37, who has been driving Yellow Cab taxis for three years. In New York, tips to drivers increased after the card technology was introduced in 2008, according to the city's taxi and limousine commission. A study by Visa Inc. showed that New York cabdrivers are receiving a 22 percent tip on average when credit or debit cards are used, versus a 15 percent tip on cash fare payments, said Tad Fordyce, a Visa product development expert. "This technology is a good move for corporate card customers. It provides a choice so they can save money by not having to take a limousine as often," Fordyce said. Chicago taxi drivers have been required to accept credit or debit card payments for years, although Norma Reyes said the rule was not tightly enforced until she was appointed commissioner in 2004 of the Chicago Department of Business Affairs and Consumer Protection, which regulates the taxicab industry in Chicago. The taxi industry has been one of the last transportation businesses to accept credit cards, Reyes said, adding that the transition is long overdue because the issues are safety and convenience. "Taxi drivers are the targets of crimes because they work alone and they work with cash," Reyes said. "I think that will change once the message gets out the cabdrivers are not carrying so much cash." About 30 Chicago taxis are equipped with the touch-screen payment method. Starting in July, the devices will be installed in about 760 Yellow, Checker Taxi and Blue Diamond Taxi cabs managed by Taxi Medallion Management, Feldman said. Plans call for expanding the program to cover all the 2,600 taxis in the Yellow fleet, he said. There are about 6,700 taxis registered with active city medallions in Chicago, Reyes said. Veteran taxi driver Wale Ajose said he likes the back seat technology because it helps minimize potential disputes with customers. "It doesn't give you a hard time," said Ajose, 50, a driver for Yellow. "The old system takes several minutes to process the credit card. Customers complain, 'What's taking you so long?' The back-seat swipe card is very, very fast." However, Ajose said he does worry that more customers will switch from cash to credit cards, which will affect his earnings because of the 5 percent service charge the credit card companies impose. Creative Mobile Technologies is providing the touch screens free of charge to taxicab companies in all three U.S. cities in exchange for rights to generate revenue from on-screen advertising, officials said. Already, some Chicago taxi riders are experimenting with the screen prompts to see what the technology can do. "Kids love to play with the touch screen," Barry said. "They ask me if they can turn on cartoons. One boy asks me, 'Where are the dinosaurs?' I say, 'Not yet.' " Programming, including local Chicago news, sports, entertainment, restaurant listings and tourist information, is still in the works, along, of course, with advertising, said Jesse Davis, president of Creative Mobile Technologies, which was founded in 2005 in response to a mandate in New York requiring the technology in all Big Apple taxis. Passengers in Chicago have the option to hit the mute button on the screens during rides if they prefer. That was done after "I received phone calls from irate elderly customers who did not want to listen to the music offered," Feldman said. Reyes' department has received 298 taxi customer complaints in connection with credit cards in the first five months of 2009, compared with 376 in the same period last year. More than 900 such complaints were logged in all of 2008. Reckless driving complaints about cabdrivers topped the list, with more than 2,400 received last year. No. 2 was rude drivers, with more than 1,200 complaints in 2008. Cab customers in Chicago will flock to the technology because their credit or debit card transactions are secure, Davis said. "The driver has zero interaction. It amounts to total rear-seat control," he said.
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