Cab charges: San Francisco taxi customers will be able to swipe credit cards in backseat machines.
All San Francisco taxicabs will be soon outfitted with rear-seat credit card readers, but drivers will pay a reduced fee when a customer chooses to use them. Those changes, approved Tuesday by the Municipal Transportation Agency, aim to make it easier to pay for cab rides.
The agency has required taxis to accept payment by credit card since last July. But many drivers have objected to the 5 percent fee they’re charged on each transaction and refused to accept payment in anything other than cash. Many drivers tell customers the readers are broken.
Ed Reiskin, the agency’s director, said the changes were part of a comprehensive effort to overhaul and improve taxi service and make it more convenient.
“If we want people to feel they can live in San Francisco without having cars, we need
to have good taxi service,” he said. “Because you can’t make all of your trips on bike, on foot or on transit.”
Outside City Hall, dozens of taxis, horns blaring, circled the block, sounding like a motorized swarm of locusts in a protest against the agency. Some drivers complain that the agency is milking the taxi industry to raise money for other transportation purposes. Drivers also protested a day earlier, with about 20 cabs traveling in a caravan to the curvy section of Lombard Street.
About a year ago, the agency ordered taxis to accept credit card payments but allowed use of credit card readers mounted in the front of the cab with cards swiped by drivers. About half of the cabs already have backseat terminals, said Christiane Hayashi, the agency’s taxi director. The terminals feature video advertising in addition to processing credit-card transactions.
But along with the creditcard mandate came a 5 percent charge assessed to drivers on all transactions. Drivers objected to the charge as excessive, saying that merchants are typically charged much lower rates, and that the fees eat into the meager incomes they earn as independent contractors.
After months of discussion, the agency recommended limiting the processing fee to 3.5 percent. But that didn’t satisfy drivers or taxi company owners.
Drivers complained that the reduction wasn’t enough.
“These are costs that should be borne by the taxi companies,” said Mark Gruberg, a driver and head of the city’s taxi drivers union.
But cab company owners said they had agreed to pay the firms that operate the terminals 5 percent, and the reduced fee will make it difficult to pay for them.
Han Su Kim, president of De Soto Cab Co., said the backseat terminals are a huge success, and said the impact of the processing fees on drivers was minimal, perhaps $6-7 a day.
Directors said the fee reduction and the backseat terminal mandate seemed like a reasonable deal given the complexity of San Francisco’s taxi system and the history of tension between drivers, cab companies and the city.
“This is a very good compromise given the competing interests,” said Tom Nolan, chairman of the agency board. “One of the telling signs is that no one likes it too much.”