Credit card fees hurting cabbies and passengers 

Finding common ground on a topic in The City is rare, but that is exactly what has happened over the topic of credit card payments in taxicabs. Unfortunately, the unanimity is that just about everyone hates how the policy has played out.

In 2010, the San Francisco Municipal Transportation Agency, which oversees the taxicab industry, mandated that all registered San Francisco cabdrivers accept plastic fare payments. The policy was put into place to make life easier for San Franciscans and cab patrons who are visiting The City for vacation or business.

As more cab users began sliding the plastic for their fares, however, the taxi companies began bitterly complaining about the high monthly costs for bulk credit card payment processing. Roughly one-third of The City’s major-company cab fares reportedly are now paid with credit cards. So earlier this year, the SFMTA added a new rule letting cab companies charge drivers a 5 percent card fee per fare. The SFMTA says credit card fees for cabbies have become common in other American cities, and the rate ranges from 3 percent to 10 percent.

The blowback from the added fee for the cabdrivers has extended beyond the driver’s seat and is now affecting riders who use cabs. A San Francisco Examiner report had little difficulty finding taxi riders who complained about cabbies wanting cash for fares instead of taking credit cards, as they are required to do. Riders told The SF Examiner that drivers routinely announced they would not take credit cards as soon as the passenger entered the cab. Other drivers told passengers the credit card readers were broken, despite the fact the SFMTA mandate requires a backup form of accepting plastic payment.

In the worst stories told by riders, they told of being ordered out of cabs after a few blocks since they did not have cash. Others said drivers took them to ATMs to withdraw cash — a time-consuming inconvenience that might also cost the passenger a bank surcharge.

On the other side of the argument are cabdrivers, who have traditionally complained that they are hard-pressed working people struggling to earn a decent living. They say a typical merchant swipe fee is 2 to 2.5 percent. Cab companies already charge drivers nearly $100 a day for cab use; that excludes gas. Cab companies do not offer any wages as drivers are "contractors," or any job protections or health benefits. Furthermore, drivers complain of having to wait for the credit card payments despite having to shell out the cab usage fee upfront.

Though it is not easy to envision a solution to this problem that will satisfy everyone 100 percent, it is clear that the SFMTA needs to bring the topic back to the table for a reworking. The SFMTA needs to recognize that the drivers are sidestepping the requirement to accept credit card payments. The cab companies need to realize that they are losing business from cab patrons who may not have cash with them. And cabdrivers must acknowledge that they are inconveniencing riders.

The worst action at this time from all parties is inaction. The taxicab industry and its overseers cannot continue to inconvenience tourists and business travelers who play a significant role in the economy of The City. Additionally, San Franciscans deserve cab service that is reliable and easy to pay for.

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