Nelson Nygaard Releases Study On 5% Credit Card Fees, Rear Seat Payment Terminals, And Electronic Waybills. Presentation Scheduled For MTA Board Meeting Tuesday, December 6, 2011. By John Han.

Rear Seat Passenger Information Monitor (PIM).  

File photo by John Han

The consulting firmed hired by San Francisco to study 5% credit card fees, rear seat passenger information monitors (PIMs), and electronic waybills, has completed its study and has now published its report.

The study, conducted by Nelson Nygaard, is scheduled to be presented with recommendations to the Municipal Transportation Agency (MTA) at it's regular Board meeting, Tuesday, December 6, 2011. (Under agenda item #16)

The firm, in its report, makes nine recommendations, including setting a minimum amount to passengers paying with credit cards, without specifying what a minimum should be.

Another recommendation is to mandate that drivers be able to disable, or at least control the audio levels on the rear seat PIMs from the front seat. The report says that audio may be more than annoyance, but a potential safety hazard for drivers.

Additionally, the report recommends that the rear seat PIMs be removed altogether from the credit card fee waiver, saying it should be a business decision whether companies install PIMs or not, rather than a government incentive program that is, “linked to fees on credit card trips charged to drivers.”

The report doesn't mention specifically whether 5% credit card fees passed onto drivers should be lowered. But it does recommend that the SFMTA pre-qualifies credit card companies based on rates and rate structures, with a goal to minimize costs to drivers. 

The assumption, according to the report, is that drivers would most likely end up covering the credit card costs.  Meanwhile, the firm recommends mandating the use of electronic waybills for data tracking.

The full report with its recommendations can be viewed by CLICKING HERE.  Additionally, an SFMTA final report titled, "Taxi Study:  Credit Card Processing Fees, Back Seat Monitors, and Electronic Waybills" is available on the SFMTA website and can be VIEWED HERE.

On Credit Card Fees:

The Nelson Nygaard report recognizes drivers' complaints that the 5% credit card fee is too high. According to the report, one credit card company stated the processing costs are about 3%. Another stated that it ranges from 2.35% - 2.5%.

But according to the report, the higher 5% fee pays for more than just the costs for companies to process cards, and to perform card related services. The higher than normal fee also covers “profit”, and covers, “equipment costs and installation”, meaning the installation of rear seat PIMs.

The report recommends prohibiting the use of alternatives like Square.

On Rear Seat Passenger Information Monitors (PIMs):

The report says there is insufficient data to know for sure if rear seat PIMs enhance the “San Francisco taxi customer experience.”

Preliminary data suggests that the tip prompters on the rear seat PIMs generate better tips for drivers.  Yellow Cab's analysis suggests a tip increase of 2.5%. De Soto's analysis suggests 3.2%. 

That still would seem less than a 5% increase seemingly needed to make up for the 5% credit card fees that drivers are being charged. The study says more research is necessary.

Preliminary SF data suggests exposure to radio frequencies from rear seat PIMs pose no threats to the drivers' health, but that further tests should be made because of small samples.

On Electronic Waybills:

The report recommends the use of electronic waybills.

For background information about the credit card fee waiver, CLICK HERE.

Thanks to the SF Examiner for reporting the taxi study.