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Credit cards: Downfall or savior of NYC cabbies?

Jeremy Simon

Q: What’s yellow, takes plastic and turns red? A: New York City taxi drivers.

NYC taxi credit card acceptance.JPGThat’s because NYC cabbies remain unhappy about the fact that they are required to accept payment by credit card. Taxi drivers didn’t like the idea of credit card readers way back in 2007, when they had been installed in just half of all NYC taxis. According to an article in the New York Times, every yellow cab in the city was equipped with a credit card reader as of last November — but cabbies still haven’t warmed to the idea.

Still, travelers across the country are enjoying plastic-friendly upgrades beyond just New York’s taxi fleet. Select machines in California’s Bay Area Rapid Transit (BART) system accept credit and debit cards, while certain fare card vending machines in the Washington, D.C., metro allow riders to pay with American Express, Visa, MasterCard, Diners Club, JCB and Discover credit cards.

Back in New York, taxi drivers told the Times that being forced to take plastic has hurt their business due to the added cost of interchange fees, which merchants are required to pay when customers charge purchases. Additionally, the cabbies say the impact of a slumping economy has resulted in fewer fares, shorter trips and lower take-home pay.

If all that makes you feel bad for cab drivers, listen to what the Taxi and Limousine Commission has to say.

The TLC (which is the agency responsible for licensing and regulating yellow cabs and other for-hire vehicles) recently shared the findings from data it collected from cabs with computerized systems that record each trip and fare. “Among the more surprising findings is that credit cards may be saving the industry from feeling the worst effects of the recession,” the Times reports. The TLC’s chairman, Matthew Daus, sounded like a credit card industry cheerleader when he told the Times that installing credit card readers in cabs “has helped keep them afloat.”

Although he loses points for confusing a cab with a gondola, Daus seems to be supported by the findings: Data from old-fashioned taxi meters has shown for several years that about 400,000 to 450,000 cab rides happen each day on New York streets. That level doesn’t appear to have changed much in recent months, with data from the computerized systems indicating cabs carried an average of 432,000 fares in December, 455,000 fares in January and 478,000 in February. Furthermore, one in five trips was paid for with a credit card, up from a scant 6 percent of rides one year earlier.

The TLC’s Daus says companies that formerly urged employees to take limos are instead encouraging workers to commute via the lower-cost cab and put it on plastic. That change appears to have helped make up for business lost elsewhere. Still, cab drivers’ group the New York Taxi Workers Alliance maintains that with more cabbies on the streets due to job losses in other industries, individuals drivers end up with smaller fares.

Caught between a little TLC and New York’s lovable cabbies, who would you believe?

See related: NYC cabbies don’t want your plastic, Card-hating cabbies, you’re being watched

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