I read the New York Times article New York’s Cabbies Like Credit Cards? Go Figure with interest as it told the story of how New York’s cabbies originally resisted accepting card payments and how card acceptance has emerged as an unlikely savior for New York’s taxi industry.
In the beginning, when forced to adopt card acceptance, drivers went on strike citing the burden it placed on drivers. A short two years later overall ridership, revenue and tips for drivers have all increased.
Name another industry right now where you will read the following statements from merchants, trade associations and government commissioners about credit cards being good for business.
“It’s better,” said Naveed Shah, 35, a driver for five years, as he gassed up his Ford Crown Victoria recently. “If there was no credit card, people aren’t going to take taxicabs.”
“Credit cards helped the New York industry stay stable in a time when the rest of the for-hire industry was in significant decline,” said Alfred LaGasse, chief executive officer of the Taxicab, Limousine and Paratransit Association, a national trade group.
New York’s taxi commissioner said, “New Yorkers are getting more accustomed to going around without cash. We think it’s a good thing.”
All summer I followed the Interchange debate, where a recognition of the benefits that card payments deliver was missing. In reading the praise here and contrasting it with the attacks from interest groups on the Interchange price structure that drives payment card use, it’s clear we are witnessing two distinct stages in the lifecycle of card acceptance.
Upon first adopting card payments, all industries experience a honeymoon where the benefits of card acceptance are in full glory. Yet over time, as card payments become a way of life, this normality begins to fade the benefits of card acceptance until only the service costs remain in sight.
Is it already happening in the NY cab world? “Once considered a convenient payment method for longer trips, often to the area’s airports, credit cards are now being used for shorter, cheaper rides, the type of $5 rainy-day indulgences that were once handled exclusively with cash.”
As passengers paying with credit cards becomes second nature, will cab drivers soon forget the benefits first realized in 2009?
PS. If your cab company is looking for a customer-friendly device that requires no signed receipts, no minimum payment and lets passengers swipe the card and add tips themselves, inquire about a Vantage merchant account using wireless Verifone payment technology.