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