Friday, April 1, 2011

Back Seat Terminals: Demonstrated

Athan Rebelos (photo, person) and Hansu Kim (photo, hands) were kind enough to show me the VeriFone PIMs at Desoto Cab Thursday.

I now understand that I made some mistakes in my previous post on the subject. For one thing, the terminals will broadcast ABC news feeds so, indeed, they can be described as TVs. (I'll mention another misconception later in the post.)

I came as a skeptic. I wasn't convinced that customers would tip more and I was very concerned about drivers not being able to control the sound.

In fact, I felt that, if I couldn't turn off the sound, I didn't want the damn thing in my cab.

The truth, as it turns out, isn't quite so simple.

  • There are sound control arrows on the front seat terminal that Athan is pointing at in the picture and the driver can turn the sound all the way off.
  • The ads and the public service announcements will NOT have sound.
  • However - the caveat - the customer can turn on the sound for the news if he or she wants to and it overrides the driver's control.
But, the speakers are on the back of the suicide seat so they point away from the driver, meaning that the sound is fairly low when it is on. Furthermore:
  • The system resets with each new fare so the sound should not remain on after a customer leaves.
  • From talking to customers who have used the terminals in NYC, the first thing most of them do is turn off the sound if it is on anyway.
  • So very few customers are likely to turn the sound on at all.
Conclusion: the sound at worst should be a minor annoyance.

What about the 5%? Will the tipping prompts really give the drivers more money?

The terminals have prompts that encourage the customers to tip well. If the fare is low (under $10?), they are prompted to tip $2, $3 or Other (photo).

On longer rides, the customers are prompted to hit 20% or Other. In addition, the 20% is calculated to include any extras such as airport or bridge tolls.

Hansu Kim says that studies have shown that customers tip up to 30% higher than they would without the prompts.

I don't know if I quite buy this. After all they are studying a novelty. Once the newness wears off, the tipping will probably level off as well.

On the other hand, the natural thing to do with these screens is to hit the $2 or the 20% buttons.

There is also the fact that (at VeriFone anyway) the customers do not have to sign the receipt for under $25. In fact, according to Mr. Kim the minimum for a signature is now going up to $50. This makes taking a credit card almost as fast as cash. The customers like this and, if the customers are happy, they tend to tip more.

In short, tt's hard for me to see how the tipping on these terminal would not more than the cover 5% drivers are to be charged for cashing the receipts - even in a worst case scenario.

For drivers at Town Taxi and Checker, even covering the 5% would be a huge improvement by itself. And, who knows? The drivers (other than Green's) at Citywide Dispatch might even start accepting credit card calls.

Why should the drivers be charged at all?
  1. As I've mentioned, many of them are already being overcharged now.
  2. The use of credit cards is expanding rapidly with huge costs to the companies. These PIMS will allow them to recover their costs.
  3. The drivers should make more money.
  4. The public should be better served.
The Merchant Accounts

There have been some complaints from drivers about these accounts - mostly due to the delay in being able to use the funds.

The normal hold on the money is 24 hours to 48 hours. On three day weekends, this can mean up to 4 days without the drivers being able to touch their money.

However, Hansu Kim says, that with a month or two, VeriFone will start "instantaneously crediting the driver's accounts," meaning that there will no longer be any hold on the funds..

It should also be kept in mind that these accounts have been set up so that the taxi companies can't touch the money and thus the unscrupulous companies amongst them will be unable to misappropriate the funds.

Advertising Revenue

As previously reported, 90% of the revenue will go the vendors and 10% will go to the drivers. The companies will NOT get a share.

On top of this, it will probably take three years before anybody makes a profit off the revenue. VeriFone estimates that it will take that long for the advertising money to cover the installation costs.

One More Thing

Contrary to rumor (spread partially by me) Hansu Kim says that he does not own shares in VeriFone. He says he is a paid consultant for the company and will neither receive a commission nor in any way make a personal profit from the sale of the units.

Kim also says that VeriFone will not hold a monopoly on the systems. CMT (being used by Luxor) and Wireless Edge will also be involved.


  1. As a rider, I'm so glad I'll be able to turn off the sound. As a friend of drivers, I hope no riders turn the sound on. How annoying! Do the terminals have an earphone jack, at least?

  2. Ed, there is too much bogous talk in this.
    If you look back city records of 2-3 years ago when cab companies were given huge gate increase;
    every third line of legislative proposal says
    that cab companies are spending enormous money
    on credit cards and that is the reason to give
    them gate increase (means to take away more money from the drivers income). Cab company expenses effect the medallion holder income so
    if a medallion holder is getting a check of
    2400 instead of 2500 or 2200 instead of 2300
    then cab company starts crying about burden of
    expenses and transfer it to the drivers. Why ?
    Why not let the medallion holder get $ 100 less
    instead the driver loosing his little income.
    As we all know that medallions were given for free to the person on the waiting list. In the past, the people just put their names on the waiting list and got medallion by driving only one year with a minimum shift of 4 hours a day, 156 days.
    Then it was 1 out of 2 year and 2 out of 3 years
    and so on untill very recently when it matured
    to 5 out of 6 years. So nearly 60-70 % got these
    medallion without driving 10-20 years but just
    1 or 2 or 3 years. I fully respect the veterns
    drivers who drove 15-20 years and got medallion
    but they are not more than 30-40 % of 1500 medallions. The federal grant of 3.4 million dollars which was spent on new meters covering
    paratransit and credit cards just a year ago then what was the need of this new verifone machine to install in the cabs and put yellow/luxor drivers which are 50 % of the industry under 5 % charge. The deputy director
    of the taxis is now saying that the drivers
    are free to have their own hand held devices
    which are available for 1.48 to 1.75% for visa
    and master card and 3 % for american express.
    In such case, why we should have these new
    verifone machines in the cabs. This is like
    starting one thousand fights a day between
    customer and the driver. Customer saying he
    would like to use these machines and drivers
    explaining them that it cost him too much money and he likes to use his system. Who is responsible for these fights. The deputy director of the taxis or the lobbyist.
    Secondly why the drivers are forced to have
    electronic waybills. They provide comfort to
    one person in the taxis but the drivers are
    totally angry on it. They do not want their
    information stored electronically where it can
    be seen by pressing one button for the whole year
    or many years. What happens if outsider hack
    this information. How many millions corner stores
    in this country are hooked up with any central
    system where the Tax Department can just go in and look into their information. If none, then
    why the privacy of drivers is compromised. Looking at the past, the waybills written on the paper and stored in the companies and upon any dispute or complaint only one single sheet of
    one particular day was taken out to show to the taxi detail and no one was looking into one or two full years paper at the touch of the button.
    We all have seen that several time a single staff member have compromised client information in several companies in this country so drivers
    are upset to be crushed in this unwanted system
    imposed on them. Tariq (I am having difficulty to post this comment under my name so I am using Anonymous word to let it post.