My Letter To The Board Of Supervisors Regarding Excessive 5% Credit Card Fees. By John Han.

Photo by John Han. 

(This is a hand delivered letter to the offices of the Board of Supervisors.)

Dear Supervisors:

As you know, there will be a taxi demonstration and strike today in which drivers will circle City Hall and honk horns from noon to 2 PM, and go to public comment at the MTA Board meeting 1pm. 

The protest is mainly over excessive 5% credit card fees, rear seat payment terminals (Taxi Tvs like they have in New York), and electronic waybill tracking. 

With respects to drivers being charged an excessive 5% credit card fee, the fees are set at 5% to help pay for rear seat payment terminals in which the passengers can swipe their cards themselves from the backseat.  Taxi Tvs will also most likely play looping advertisements the same way New York Taxi Tvs do.  Many who have taken New York taxis say the commercial ads in taxis are annoying and that they immediately turn the volume off when they get in.

The value of Taxi Tvs for New York riders is it gives uniformity in payment methods.  In other words, riders should be able to take taxis with confidence that they can pay with a credit card, and not be concerned with which taxi accepts cards, and which one doesn’t.  The Taxi Tvs provide that. 

However, in San Francisco, most taxis already have effective front seat credit card swipes.  Therefore, adding a second terminal in the rear seat that raises the credit card fees for drivers to 5% is superfluous.  In my opinion, if Taxi Tvs were to be installed in San Francisco cabs, they would mostly serve the purpose of being new toys, ornaments and décor in the cabs.  They would not necessarily serve a real safety function or purpose that isn’t already being served from the front seat, or couldn’t be served in some other, more amiable way.

Additionally, the excessive 5% credit card fee has already had negative impacts that should be taken seriously.  Because of the high fee, many drivers are simply refusing to take credit cards. 

This affects service to the public transit rider-ship. 

Some are posting signs in their cabs claiming that the credit card machine is not working.  One passenger told me a cab driver threw her out of a cab for wanting to use a credit card.   

The course of action would not necessarily be to discipline taxi drivers.  

But rather, the City should recognize that the rate of the 5% fee is excessive, and that drivers have a legitimate complaint.  If rear seat payment terminals were not to be installed in taxis, and drivers not made to pay for them, then the fees could conceivably be dropped to a more normal 3%.  Credit card fees could be processed through already existing front seat machines.  This could cool down a significant degree of driver negativity resulting from MTA policy.  

Other recommendations that could soothe the drivers’ sentiments:

• Amend the regulation requiring all cabs to accept cards.  The law could require cab drivers to accept credit cards as payment, but only for fares that are $10 or higher.  Coupled with a 3% fee, this could ameliorate some of the drivers’ stress and concern over non-cash payments and fees.  This would be slightly different from a cab company policy requiring a $10 minimum, as it would not necessarily be a minimum.  Drivers could still opt to accept credit card payments for fares under $10, only they would not be required to.

• The City should freeze gate increases until the next cycle of meter increases, (not including the MTA’s current review of an increase in the flag drop.)  On May 17^th, 2011, the MTA Board of Directors approved a 50-cent per mile and 10-cent per minute meter increase.  Because cab companies will now profit in the form of savings from not having to absorb credit card fees anymore, gate increases should be capped until the next time for a meter increase. 

• Allow taxis to turn left at the same intersections as the Muni. 

Please urge the MTA Board of Directors to consider these amendments to its taxicab credit card policy. 

Thank you,

John Han

SF Taxi Driver,

Driver Representative on the Taxi Advisory Council, SFMTA

1johnhan@earthlink.net

(415) 571-1574 

Going beyond the letter sent to the Board of Supervisors, a couple quick thoughts...

Direct depositing to a bank account of a driver's choice, a debit card direct gate fee payment system, a capped rate at 3%, and no company transaction fee, should be all that is required of companies to qualify for the credit card fee waiver.  Rear seat PIMs should be eliminated from the waiver requirement. 

No electronic waybill tracking system should be implemented without publishing a privacy statement,  and making the statement easily available to the public.  However, a large number of taxi drivers oppose implementing any form of electronic tracking system.