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Innovations and Payment Systems

Plan requires NYC taxis to accept credit, debit cards

Summary

A new plan in New York City could require taxi drivers to accept payment in the form of credit cards and debit cards.

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New York City Council is evaluating the costs and benefits of a new plan that would require city taxi drivers to accept payment by credit card or debit card.  In addition to requiring drivers to take credit cards and debit cards in exchange for customers’ fares, the plan would also result in the addition of high-tech gadgets to the inside of cabs which offering touch-screen monitors passengers could use to watch television, track sports scores and follow their cab ride on a global positioning system.

Compare Cash Back Credit CardsBut not all cab drivers are happy about having to accept payment by credit card and debit card, with drivers arguing that the 3.5 percent credit card transaction fee would end up trimming their earnings.  Also, drivers expressed concern that should the card system go down, they would lose the fare if the passenger is not carrying any cash.

However, the Taxi and Limousine Commission, which regulates New York City cabbies, notes that the 3.5 percent fee negotiated with the credit card companies is significantly lower than what cab owners pay to take credit cards.  The commission said that citywide, over 3,000 cabs accept credit cards at a cost of about 5 percent per transaction as well as a weekly fee of $8 to $12.  Vendors and commission officials suggest that driver profits will rise if passengers are allowed to pay with credit cards and debit cards.

According to the commission, all 13,000 medallion cabs in New York will have the equipment installed by the end of 2007.

For passengers, the ability to pay cab fares with a credit card could mean more cash back, airline miles or rewards.

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