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CARD PAYMENTS IN CABS: Time to mandatorily embrace the future?



The taxi industry has seen accelerated changes recently, partly due to the coronavirus pandemic, and especially around the shift to greener, Zero-Emission Capable (ZEC) vehicles and altered urban spaces to support cycling and walking. Yet, one shift has quietly gained momentum: the widespread adoption of contactless card payments in licensed taxis throughout the UK.


During the height of the pandemic, the Government encouraged contactless payments to reduce virus transmission. This change aligned with a broader move away from cash across all retail sectors. Now, the push for a cashless society is stronger than ever.

Many taxi drivers have already adapted, accepting card payments alongside cash. However, the debate on whether to make such payment methods mandatory is stirring. Customers expect consistent and convenient service, desiring the certainty of card acceptance as they would find in nearly all other services during their outings.


The argument extends to safety, particularly for women. The risk associated with carrying cash late at night is significant. Ensuring that taxis offer a secure, cash-free way home contributes positively to public safety and reduces the need for potentially risky ATM visits.


Yet, some drivers resist mandatory card payments. The preference for cash is clear — it offers immediacy and can be crucial for cash flow at certain times. However, the taxi service is fundamentally about passenger convenience and choice.


Concerns over tax avoidance are diminishing, thanks to new HMRC checks introduced, requiring cabbies to register with HMRC to renew their licence. All revenue earned on digital booking apps must also be accounted for directly with HMRC now.  Another argument is that mandatory payments could limit drivers' ability to ‘cheery pick’ their fares, particularly in situations where they might prefer not to take certain jobs. However, this overlooks the passenger’s need for reliable and non-discriminatory service and certainly should not be used as argument to reject card usage.

While drivers cite high payment processing fees and delays in funds transfer as drawbacks, advancements in technology and increased competition have driven costs down and improved payment speeds. Concerns about network coverage in rural drop-offs remain, but these are infrequent, and support is available on most payment platforms.


Looking to the future, the preference for cash will likely diminish as younger generations who are accustomed to digital payments become the majority. Resistance to mandatory card payments often stems from a desire for driver autonomy in accepting payments.


To ease the transition towards mandated card payments, flexibility in choosing payment solution providers is key. Licensing authorities should consider allowing the use of various devices, including modern handheld units, which are already popular in mobile retail.


Ultimately, embracing card payments will align taxis with broader transport services, enhancing their competitiveness against digital ride-hailing platforms. As public transport across the UK accepts card payments ubiquitously, the taxi industry arguably should adapt to meet these evolving customer expectations in the 21st Century.

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