Thursday, March 24, 2011

On the Back-seat Terminals: Some Facts?

There is a lot to be said about the back-seat terminals (photo) currently being installed by National, Luxor and Yellow Cabs. Some of it might even be true. (See TaxiTownSF.)

But there are some misconceptions.  I don't claim to be an expert but I will try to clarify a few points.

1. It's not a TV, it's a video terminal and a card swipe.  According to Chris Hayashi, it will have no audio. It will, however, carry advertisements and public service messages. I don't know if it can be turned on and off by the customer.

2. The taxi companies WILL NOT pay for the terminals. The vendors will pay for all equipment and pay for their costs out of the fees collected and advertising revenue.

3. The cab companies WILL NOT share any advertising revenue with the drivers. The vendors will get 90% of the profits above the installation costs and 10% will go to the Drivers Fund.

4. The taxi companies ARE NOT currently allowed to be merchants for credit card accounts ( for obvious reasons), although some companies are requesting the SFMTA to be allowed to be merchant account holders themselves.  The actual cost of the merchant account is closer to 3%, so there is potential profit involved.

5. Despite it's prominence in the field, Verifone will probably not be the only vendor. Any company that meets certain standards set by the MTA could qualify. CMT and Wireless Edge are also planning to compete.

6. Although drivers are required by law to take credit cars, I notice that there is no regulation that says that a driver MUST use a specific credit card cashing system, especially since the drivers are not employees. Drivers are free cash them anywhere or any way they like.
  • Many drivers - especially those at Desoto Cab already have their own merchant accounts.
  • For drivers with smart phones Square - which is a free and charges 2.75% - is a good option.
  • There are other companies on the market with similar or possibly lower rates such as Obopay which claims to charge only 1.5% per transaction and doesn't need a swipe.
  • I understand that the Russian speaking lady near Checker Cab will still be happy to cash receipts for 10%.
7. Taxi companies have the option of not putting in the terminals in which case they are responsible for paying to cash the credit card receipts.


  1. 'Taxi TV" is just a generic nickname used to describe them. They're not really TVs. But in New York, they're nicknamed "Taxi Tvs".

  2. I got a demonstration of the Verifone back seat terminal at DeSoto, though there were not yet any advertisements on it or the ABC News programming it will also feature. With regard to the first misconception you mention, Ed, I'm afraid you've answered it with a misconception. The fact is, there IS sound. It can be varied and tamped to a murmur, perhaps, but it's still and definitely audio, and since it's the news and advertising, the term TV is perfectly accurate. The driver can control the volume to a point but cannot turn it off. Thus if you or the customer wanted to talk, listen to quiet music, or just be quiet, there would always be the constant murmur of the machine. The advantage is that customers can swipe their cards and add tips through prompts. DeSoto says drivers are reporting higher tips. That's the selling point. So there's the tradeoff. As for the driver fund share dropping from 50% to 10%, I think that fits under the category of backroom swindle. Ultimately, the benefit of customer control of the transaction, which I would like, does not weigh out against the irritating, constant murmur of blather, the drunks and the children punching the thing, or the additional gadget that nobody needs. If it were just the payment screen, I'd be fine with it. I love the Verifone front screen. It's made credit cards much, much easier. But I make my tips from engaging with the customer and I am repulsed by yet another unstoppable noisemaking gadget in a small, enclosed space. A little louder and it would qualify as "torture." Bud

  3. Way should the drivers get any advertising money?
    Do they share the burden when they smash the hell out of a cab?
    When they get a $200 trip do they pay the exact same gate as any other day?
    I am actually against advertising inside but it looks like I'll be over ruled on that like I am on most things.

  4. We've fully implemented the PIM's (personal information monitor) at DeSoto Cab. I still drive a cab and I have no issue working with the PIM. The audio is literally unnoticeable from the driver seat, especially if you have the dispatch radio and/or the car radio on, or even just the driver window down. My experience with the PIM has been excellent. The majority of the riders love to use it and I actually enjoy the conversation with my passengers when they sometimes need guidance through the payment process. It's usually a pleasant interaction and it just adds to the tip. My tips are noticeably higher. I assume that's partially because I don't try to discourage the passenger from paying with the card. As a matter of fact, I encourage them to. The bottom line in my opinion is that this machine makes the driver more money, it's unobtrusive and creates an interactive payment experience for the ridership. It's a positive for our industry.