March 2008
Credit Concerns
Cabdrivers are required to accept them, but why do some have problems with credit cards?
By: Jonathan Bullington
Recently, Chicago's mainstream media has drawn attention to passenger complaints against cabdrivers. One such complaint has been that drivers refuse to accept credit cards, despite being required to do so. Therefore, the question becomes, why are some cabdrivers so hesitant to accept credit cards?
Since first appearing in the rules and regulations several years ago, credit card acceptance has been slow to catch on with drivers.
“Making that (credit card) requirement was not to add undue burden on drivers,” said Department of Consumer Services (DCS) Commissioner Norma Reyes. Many times, Reyes has stated the benefits of cabbies accepting credit cards - mainly, that credit cards and other electronic forms of payment make the industry less cash dependent, meaning that drivers, long the targets of assaults and robberies, can become less of a target by not always having as much cash on them at a time.
But drivers don't entirely see things the same way. They complain about the time it takes to process credit cards, arguing that, while they're waiting for a card to be processed, a traffic aide or police officer is writing them a fly-ticket.
“Certainly doing a credit card transaction will take a little more time,” Reyes said. She offered suggestions for ways drivers could minimize the time and protect themselves against these tickets. For starters, Reyes said drivers could ask a customer at the beginning of a trip if they are paying with cash or credit card. That way, Reyes said, drivers can adjust accordingly. As for tickets, Reyes said credit card transactions are electronically stamped with the date and time, information that can be compared against the time and date on a ticket as a possible defense, showing that the driver was pulled over for a reasonable time necessary to unload a passenger.
Another problem faced by drivers has to do with receiving payment from credit card transactions.
The name Steve Wiedersberg should be familiar to many in Chicago's taxi industry. Wiedersberg is a veteran driver and advocate who has experienced his own problems receiving payment from credit card transactions. According to him, the problem starts at the point of sale and goes something like this: A passenger offers a credit card for payment of a fare. The driver (in this case, Wiedersberg) swipes the card through his in-cab machine; a receipt prints out saying the card has been approved and giving a corresponding approval number - end of transaction. Wiedersberg then takes the receipt to his affiliation to receive payment, which in his case, comes in the form of a lease credit. One-to-two weeks later, Wiedersberg is informed by his affiliation that the card has been declined and he is responsible both for paying back the lease credit given as well as for finding the passenger to collect payment.
“I don't have the time, facilities or personnel to recoup these losses,” Wiedersberg said. He's lost more than $100 from credit cards that were approved in-cab and later declined.
His driving partner, Fritz Clermont, said he has lost more than $300 of his own money paying for cards that he's been told were either declined or stolen.
The Chicago Dispatcher spoke with several drivers from different affiliations to see if this problem is an isolated incident or something more. Out of those we spoke with, the majority shared personal accounts of situations similar to what Wiedersberg and Clermont have experienced. One driver showed us a credit card receipt for $60 that read “approved” on it, followed by a document from his affiliation saying the card was declined.
“We're trying to help customers, but it's not right when we lose money,” this driver said.
Addressing this issue, Reyes said the following: “I don't believe [drivers] should be victims.”
Reyes added that drivers who have experienced this problem of cards being declined should write her a letter detailing the problem and include copies of the transactions in question.
“If it shows that the customer in fact was taking a free ride, then I would look to see what charges we can bring,” Reyes said.
The other complaint made by many of the drivers we spoke with had to do with the service charge levied against them by their affiliations for processing credit cards. Many affiliations charge upwards of five percent to process credit card transactions, leaving drivers to wonder why they have to pay to process a form of payment they’re required to take, and, why they can't pass on that charge to their customers. The drivers we spoke with said a minimum charge for credit card transactions could help alleviate their problems with a service charge.
For her part, Reyes said the idea of a service charge or minimum charge for customers using credit cards is something her office is “looking at.”
