Drivers lament high fees for credit cards
Taxi drivers say they have no objection to new requirements put into effect this week to accept credit and debit card payments, but argue that the fees they have to pay on each transaction are too high.
“We’re all for modernization, but the problem is that some companies have charged very high fees; they took advantage, and we deplore this,” said Benoit Jugand, spokesperson for the Regroupement des travailleurs autonomes Métallos, a union representing 5,000 taxi drivers.
As of Thursday, taxi drivers must offer electronic payment through credit or debit cards, or face fines ranging from $125 to $375.
Jugand said accepting credit card payments penalizes drivers because some taxi companies keep between five and seven per cent of every transaction by cabbies driving under their banner.
Waking Devallon, a driver for Diamond Taxi, said if given the choice, he would always opt to be paid in cash, because that way, he can keep all his earnings.
Diamond keeps seven per cent of every credit card transaction, he said.
“It’s too much,” Devallon said. “Lots of drivers don’t want to take a credit card for a short trip.”
This past summer, Diamond Taxi president Dominique Roy said fees may be reduced when electronic payments are compulsory, because there will be more overall transactions.
Jugand also denounced the ridesharing company Uber for capitalizing on this evolution in the taxi industry by announcing a price drop for its competitive Uber X service on Wednesday.
Uber announced it reduced its rates by 10 per cent for its Uber X service, which allows drivers to use their personal cars to offer rides in exchange for money. The company also reduced its rates for the Uber XL service (for minivans) and Uber Select service (for luxury cars).
Jugand called this a dirty trick by Uber, and said the timing of the move was no coincidence.
However, Jean-Nicolas Guillemette, the general manager of Uber Montreal, said the timing of the price drop had nothing to do with the change in the taxi industry. He said Uber uses a mathematical algorithm to determine the best time to cut prices.
“The goal is to convince more people to change their habits how they get around the city,” Guillemette said. He added that he doesn’t believe that Uber is competing with taxis. “Our biggest competitors are cars with singleoccupancy vehicles.”
He claims that many people who use Uber tend to leave their cars at home, and that’s good for all forms of public transit, including taxis.
“We found that 68 per cent of our users only take Uber one way, so that means they’re using another form of public transit to go the other way,” Guillemette said.
Devallon doesn’t buy that argument.
“Before, as a taxi driver, you could work 10 or 12 hours per day and earn a living; now with Uber X, you have to work 14 or 16 hours just to make the same amount,” Devallon said.
Jugand said the Quebec government must declare Uber X illegal and crack down on the service, saying it engages in unfair competition because drivers don’t have to pay for expensive taxi driver permits, which cost up to $200,000.
Quebec Premier Philippe Couillard has said he is open to the possibility of finding a way for Uber to operate within the existing legal framework. Transport Minister Robert Poëti has said he has asked Uber to register as a taxi company, which it has refused to do.
However, not everyone believes the downturn in the taxi industry is due to Uber’s arrival.
One taxi driver, who did not want to be named, said the slumping economy, and the migration of head offices out of the downtown core are also to blame.
“Many large companies have moved out to Laval and the West Island,” he said. “We’re seeing now that it’s more expensive to buy a taxi licence in Laval than in Montreal, because you can make more money there.”