The city’s taxi driv­ers have un­til the end of sum­mer to switch to an app-driven dig­i­tal me­ter sys­tem.

The Washington Post Sunday - - METRO - BY LUZ LAZO luz.lazo@wash­post.com

The mod­ern­iza­tion of the District’s taxi fleet en­ters its next phase this sum­mer when it re­tires the hard-wired me­ters that have been at the heart of op­er­a­tions for more than a cen­tury.

In its place, taxi­cabs will be re­quired to have a dig­i­tal fare pay­ment plat­form aimed at stream­lin­ing the taxi ex­pe­ri­ence for riders and help­ing driv­ers com­pete with app-based ride­hail­ing ser­vices.

The city’s more than 8,000 taxi driv­ers have un­til Aug. 31 to dump their tra­di­tional me­ters and re­place them with a tablet or smart­phone that will be equipped with a dig­i­tal me­ter app, sim­i­lar to those used by app-based ride-hail ser­vices such as Uber and Lyft. The tablet will be mounted in the car so a pas­sen­ger can see the progress of the trip and the fare — just like a me­ter — but the app also will show a map of the route and es­ti­mated time of ar­rival.

The District is the first ma­jor U.S. city to shift its fleet to dig­i­tal me­ters, of­fi­cials said.

“We are rein­vent­ing the taxi ex­pe­ri­ence, mak­ing sure that it is bet­ter for riders and driv­ers,” said Ernest Chrap­pah, di­rec­tor of the D.C. De­part­ment of For-Hire Ve­hi­cles, which reg­u­lates the in­dus­try. “The in­dus­try is ready.”

The city has re­cruited the mo­bile pay­ment start-up Square to sup­port the tran­si­tion to dig­i­tal me­ters.

City of­fi­cials say the global brand brings a pay­ment sys­tem that con­sumers are fa­mil­iar with. Square’s tech­nol­ogy has been a pop­u­lar op­tion for small-busi­ness own­ers, al­low­ing them to com­plete credit card trans­ac­tions with­out a cash reg­is­ter. Many small food es­tab­lish­ments, in­clud­ing some of the city’s pop­u­lar food trucks, use Square to ac­cept credit card pay­ments on mo­bile de­vices.

As part of the deal, Square agreed to charge 2.65 per­cent in commission to process pay­ments, lower than the stan­dard 2.75 per­cent fee it usu­ally takes per trans­ac­tion, ac­cord­ing to city reg­u­la­tors. It is also much less than the credit card trans­ac­tion fees cabbies pay to their pay­ment providers, which can be as high as 4.5 per­cent.

The De­part­ment of For-Hire Ve­hi­cles has been test­ing a dig­i­tal me­ter sys­tem it de­vel­oped in­house. But the de­part­ment is also re­view­ing pro­pos­als from other app de­vel­op­ers. Mul­ti­ple me­ter apps are ex­pected to be avail­able for use by the driv­ers, of­fi­cials say.

“We be­lieve the taxi mar­ket will rise to the oc­ca­sion and con­firm that they are not only re­silient but they are in­no­va­tive,” Chrap­pah said.

The city’s taxi rates will not change nor will the way trips are mea­sured. But the dig­i­tal sys­tem will al­low taxi com­pa­nies to of­fer re­wards for fre­quent riders or adjust their street hail fares in re­sponse to mar­ket de­mand, such as of­fer­ing dis­counts dur­ing times of low de­mand. The old me­ter sys­tem does not al­low such changes. Surge-pric­ing will not be al­lowed how­ever, of­fi­cials said.

The dig­i­tal me­ters are ex­pected to trans­mit trip data such as geo­tagged ad­dresses, driver in­for­ma­tion and fare amounts to the city, and will have the ca­pa­bil­ity to cal­cu­late rates for shared rides.

Taxi com­pa­nies and driv­ers have been pre­par­ing for the tran­si­tion for months, but the change comes af­ter years of strug­gle to keep up with com­pe­ti­tion from ride-hail­ing com­pa­nies such as Uber, and the de­mands of the mod­ern rider.

Among other changes to the in­dus­try in re­cent years are reg­u­la­tions re­quir­ing credit card read­ers in all cabs, a uni­form color scheme for the fleet and improved customer ser­vice.

Com­pa­nies have been in­vest­ing in newer ve­hi­cles and train­ing driv­ers to of­fer bet­ter customer ser­vice. Many taxis are al­ready equipped with tablets, in prepa­ra­tion for the switch to dig­i­tal.

“There has been a com­plete tran­si­tion. We are see­ing cleaner cars. We are see­ing much less of the late model cars,” said Roy Spooner, gen­eral man­ager of D.C. Yel­low Cab, which has 500 taxis. “The dig­i­tal me­ter is just part of the evo­lu­tion.”

The changes also are part of a strat­egy to re­cover some of the busi­ness the in­dus­try has lost to Uber, Lyft and other ride-hail­ing com­pa­nies. The app-based ser­vices hit the in­dus­try hard when they ar­rived in the re­gion just over five years ago and be­came the pre­ferred al­ter­na­tive for many riders who had com­plained about the taxis be­ing an an­ti­quated sys­tem with ag­ing fleet and poor ser­vice.

Two years ago, the taxi in­dus­try gen­er­ated $4 mil­lion in sur­charges for the District while the ride­hail­ing and limou­sine ser­vices gen­er­ated about $1 mil­lion. So far this fis­cal year, ride-hail­ing rev­enue to the city is close to $3 mil­lion and for taxis, just un­der $2 mil­lion.

And as con­sumers’ op­tions have grown, taxi­cab rev­enue has con­tin­ued to drop: City taxi­cabs made $19 mil­lion in fares this past March com­pared with nearly $22 mil­lion in March 2015, ac­cord­ing to city data.

But city of­fi­cials think the im­prove­ments of the past few years are help­ing the taxi in­dus­try be­come more com­pet­i­tive. Whether it’s those in­vest­ments or Uber’s troubles — in­clud­ing ac­cu­sa­tions of sex­ual ha­rass­ment, in­tel­lec­tual prop­erty theft and other in­ci­dents that have caused pub­lic re­la­tions prob­lems for the com­pany — the taxi in­dus­try is see­ing small signs of growth.

“We see the ups and down still in the in­dus­try. We take some hits. But peo­ple are start­ing to make their way back to taxis,” Spooner said.

Go­ing dig­i­tal could give the taxi in­dus­try the ex­tra boost it needs in a mar­ket where Uber and Lyft are able to charge rates sig­nif­i­cantly lower than taxi­cabs, of­fi­cials say. The op­tion to adjust rates also will ben­e­fit pas­sen­gers who are look­ing to share rides and lower fares.

A dig­i­tal sys­tem also will elim­i­nate rider anx­i­ety of get­ting into a cab with a bro­ken credit card reader and give pas­sen­gers the con­ve­nience of “tap and go” pay­ment op­tions such as Ap­ple Pay and An­droid Pay, in ad­di­tion to credit cards and cash. The plan is to fea­ture es­ti­mated fare cal­cu­la­tions, GPS route track­ing and elec­tronic re­ceipts.

And the new sys­tem will cut ex­penses for driv­ers who in­vest roughly $2,400 to out­fit their cabs to meet cur­rent re­quire­ments, in ad­di­tion to fre­quent me­ter cal­i­bra­tions that cost $50 each, of­fi­cials say.

The shift should not be dif­fi­cult be­cause most driv­ers know how to use a smart­phone and down­load an app, and most riders are com­fort­able with and pre­fer dig­i­tal plat­forms.

“This is one of the big­gest in­no­va­tions that the taxi in­dus­try will ever see.” Chrap­pah said. “It is go­ing to come down to the fi­nal push. But the in­dus­try is ready.”

D.C. DE­PART­MENT OF FOR-HIRE VE­HI­CLES

The dig­i­tal me­ter app and Square, which will be in all D.C. taxis by Aug. 31, al­lows riders to pay fares dig­i­tally, as well as see a map of the route and es­ti­mated time of ar­rival.

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