For nearly two years, news reports have chronicled New York City cab drivers’ love-hate relationship with credit cards — with an emphasis on the hate. In an abrupt shift, NYC cabbies are now confessing a change of heart toward plastic payments.
Why the warming trend? According a report by the New York Times, taxi drivers’ turnaround largely boils down to one thing: money.
Cabbies’ displayed early anger over having to take credit cards. Now, The Times writes:
“[T]wo years later, the back-of-the-cab swipe has emerged as an unlikely savior for New York’s taxi industry, even as other cities’ fleets struggle to find fares in a deep recession.”
“Overall ridership and revenue have increased. More and more fares are being paid with credit cards, even for shorter rides. And tips for drivers, usually an early casualty of tough times, are up sharply, double over the pre-plastic days.”
Back-seat card readers have apparently helped boost payments, allowing taxi riders to swipe their own plastic with no signing or minimum payments required. That customer-friendly technology also lets cardholders determine their own tip amounts.
Cabbies’ growing wallets provide one more example of what credit card industry studies show: People are stingier with real money than with its plastic stand-in. Retailers have long known about this credit card generosity — which is why they put up with the fees that go along with accepting cards. Cabbies just had to learn this lesson for themselves.
While cabbies enjoy higher earnings, taxi riders may find benefits of their own:
- Payment for shorter trips. With no minimum requirements, riders can now put shorter rides on plastic.
- Easier tracking of expenses. Credit card receipts show how long the ride was and where the cab went — helpful for personal record-keeping or corporate expense reports.
- Let a machine calculate the tip. In many cabs, riders are given on-screen options for the amount of their tips — such as the choice of a $2, $3 or $4 tip on a fare under $15.
Riders — have you experienced a loving reaction from cabbies when you paid by credit card? And what have you found to be the other benefits (or disadvantages) of paying by plastic?
See related: NYC cabbies don’t want your plastic, Card-hating cabbies, you’re being watched, Credit cards: Downfall or savior of NYC cabbies?