Tuesday, September 14, 2010

TAC III Part 1

The Taxi Advisory Council met for the third time under the assured and cheerful chairpersonship of Chris Sweis.

The main topics considered were a new credit card system and how to structure the long term agenda for future meetings, with the goal of making a report to the MTA Board by 12/31/2010. There was also a brief foray into the "Gate and Gas" vs "Long Term Lease" (with no other possibility considered) debate.

Credit Card Charges

Most of the discussion on credit cards revolved around a plan to put in a backseat terminal that could be operated solely by the customers. A  5% or 6% charge would be passed on to the drivers. The terminal would also include advertising with the revenues being split between the taxi companies and the drivers.

 Barry Korengold, among others, didn't like the idea of charging the drivers and suggested the costs be passed on to the customers. Jane Bolig wondered what happened to the 75 cent surcharge for the use of a credit card which was supposed to have been passed by the MTA. Barry Toranto, during public comments, pointed out that filling stations charged two sets of prices - one for credit card use and one for cash - and thought that it would be legal for cabs to do the same as long as it was posted.

 Chris Hayashi said that Visa would not okay passing on the charges to the customer due to contractual obligations that no one but she understood and that the MTA could not regulate a private contract. She added that the taxi industry could try a "kick the door down approach to Visa" (by say, refusing to accept Visa) but there's no guarantee that it would be successful.

A few people brought up the illegal fees (reputed to be as high as 10%) that some companies are allegedly charging their drivers for the use of credit cards but, for some reason, Chris Sweis didn't think further discussion of the subject would be productive. Jim Gillespie said that Yellow Cab only wanted to pass on their actual charges which amounted to about $80,000 per month. He also claimed that San Francisco was the only city he knew of that did not pass credit card charges on to the drivers.

Hansu Kim said that the Veripone system that he represents had done studies showing that customers tipped much more than normal using Veriphone, meaning that the drivers would actually get more than the 5% charge back in tips.

John Lazar gave a breakdown of the credit card charges that Luxor deals with.
  • Visa and most other cards charge 3.8%
  • American Express charges 5.0%
  • There are also potential fraud and other problems that required staff time. 
Lazar's solution would be to raise the meter which would allow drivers to recoup the  5% and more. Athan Rebelos thought the drivers should get a 50 cent peak time surcharge along with a 50 cent surcharge for radio calls and rides with multiple stops. David Kahn pointed out that taxis in other countries charged more for picking up radio calls than for flags and suggested that we do the same here.

In short, there were many ideas but no clear agreement about what should be done.

Advertising Revenue

This was also true of the idea of splitting the advertising revenue. None of the owners liked the idea because it would be too complicated for them to figure out for each driver. No one liked the idea of audio being allowed for the advertising in the cab because, according to John Han, it would "drive me batty."

Me, too.

I don't think anyone suggested these possibilities: (1) if the revenue was large enough - to let the owners keep it and pay the 5% credit card charge themselves; or (2) To average out the amount of the advertising revenue per month and pass the driver's share back in reduced gates. But who am I to have the last word?

Part 2 tomorrow and tomorrow and tomorrow.


  1. I like charging the customer more for:

    1. Using Credit Cards
    2. Attending Radio/Computer Dispatch calls
    3. Handling baggage
    4. Multiple stops
    5. Barf inconvenience

    Restaurants do this already. You want delivery there is a charge. You want to take out extra plastic utensils there is a charge. You want extra sauce or extra salad or extra something/anything you pay for that.

    Backseat terminal is just a waste of time for the drivers in this city. There is already other things that are wasting time. Plus a backseat terminal means space problems. In New York such systems work because they have a solid partition onto which the terminal is mounted.

    75 Cents is not 5% in all transactions. That is not proper calculation. Sometimes people travel long distances and pay $100 or more using their credit/debit cards.

    The idea that the driver should be charged for anything more than what the drivers are already paying is just abuse. It is against labor freedom. I do understand that we are all individual businessmen but that was done only as a control mechanism.

    Allowing audio in the back seat... what the f***. Some crazy pervert would like to go forward with that.

    I think VISA will go with 'forward the charge to customers'. MTA will not allow such a thing? Foolish. Which other MTA public transportation allows people to use credit or debit cards? If VISA does not allow such a thing we shoud have a notice posted in the inside of the cab that goes somewhat like this for additional charges:

    Upto $10: Fee added 50 cents
    $10.01 to $20: Fee added $1
    $20.01 to $30: Fee added $1.50
    $30.01 to $40: Fee added $2
    ....and so on
    $150 to $200: Fee added $10

    Bottom line is: Make this industry more organized and safer for the driver. Drivers are the hardest working in this industry. Safer not means physically. The meaning of safe includes mental safety meaning reducing stress levels but cutting out nutty ideas and practices that rip off the driver of good energy.

  2. thank you for these reports.
    please keep them coming.

  3. Thanks for posting these, Ed. I'm disappointed to see that no one (is reported to have) represented the riding public, who, I feel pretty sure, don't want a damn thing to do with more advertising being thrown at them. Many drivers and many public consider the inside of the taxi a sanctuary -- do we really have to surrender it just because other (lesser) cities do?

  4. Hi Ed,

    Once again, thanks for the coverage of the TAC meetings. It's essential. However there are a couple of points, one for certain, that are inaccurate. I proposed that a peak time surcharge, not a credit card surcharge of 50 cents be imposed along with a 50 cent surcharge for radio calls and for multiple stops. I believe that these surcharges would help to enhance some services and also to offset the credit card surcharges for the drivers.

    I'll let Yellow Cab represent itself but I don't think Yellow (Jim Gillespie) is charging a fee to it's drivers now but that they they would like to do that in the future.


  5. Hi Brad,

    There is a Citizens Advisory Council. You might want to take this subject up with them. The advertising part of the plan isn't necessarily popular with TAC either, since most of the members are working drivers. Also, if you come to a meeting, you will be allowed to put your 2 cents in.


  6. Hi Athan,

    My apologies. My note taking failed me in your case and my proofreading did me in with Gillespie. I'll try to be more careful in the future.


  7. Hi Anon,

    A $100 barf charge has been written into the rules.

  8. Hi, not sure how the credit card processing works between driver and company but could you use the Square? www.squareup.com. Mag stripe reader that plugs into an iPhone. The device is free, surcharge is 2.8%, and iPhones are less expensive than traditional credit card readers. Square is local. I can put you in touch.