TAXI CARD PAYMENTS: Is it time to mandate nationwide?

The coronavirus pandemic has sped up many policies that directly impact the taxi industry. Many talk about the ‘building back greener’ mantra that has accelerated the move to cleaner Zero-Emission Capable (ZEC) vehicles and there has been many a discussion around lost road space to promote cycling and walking.

One of the other policies that has so far managed to fly low under the radar is contactless card payment options used within ALL licensed taxis.

During the pandemic taxi customers were urged by the Government to pay using contactless to decrease the chance of transmission. Cash was barely seen by cabbies working over the peak of the covid pandemic and that was a similar story for most other retail outlets and firms taking payment for services or products.

There are few people that can still deny a cashless society is becoming more and more expected.

While many taxi drivers do already take card payments, the question of whether to mandate the service option is becoming increasingly important if only to provide customers that guaranteed service based upon their needs and expectations.

Customers want ease. When approaching a taxi at a cab rank, they don’t want to doubt whether in fact they can use a form of payment that is accepted pretty much everywhere else on their night out on the way home.

Women’s safety is rightly high on the agenda. Carrying cash alone and late at night is not safe. Making a taxi a safe option to get home, without adding risks attached to using ATMs, can only be a good thing.

Why do some cabbies not want mandatory card payments?

Don’t get me wrong, if I had the chance of cash over a card payment, I would take cash. There’s nothing more immediate and in terms of cash flow it can be vital at some points in the year.

However, the taxi industry is a service industry and the choice should be with the passenger. Many will continue to pay by cash, but the choice should be with the customer.

Certain myths around tax avoidance remain as one trade push back, but this is certainly one that can be canned with the emergence of the HMRC taxi tax checks which began on 4 April 2022. All cabbies must now be registered with HMRC to renew their tax licence.

Another reason for cabbies to not want mandatory payment options is that it provides the opportunity to cherry pick their jobs. A lone woman approaching a taxi late at night wanting to travel to a destination the cabbie doesn’t really fancy, gives them a reason to ‘broom’ the job onto other cabbies further back on the rank. Passengers just wanting to get home shouldn’t need to ‘play the game’ asking multiple cab drivers to get them home safely.

Taxi drivers will argue that the payment processing fees are high, and it takes ages to receive the money. To be fair this was a valid argument when card payment solutions first entered the industry. However, choice and technology has driven the cost of taking payments down to less than 1% in some cases. There are also numerous next day payment offerings if cash flow is tight.

Cabbies are also concerned, especially when dropping passengers in more rural locations, that the network coverage might not actually allow for a payment to be made. Occasional network failures do happen, but very rarely. Whilst it’s a pain, 24-hour helpdesks can help take the payment via a phone call too should the situation ever pop-up.

Tony Barker told TaxiPoint: “Pragmatically speaking, most of the customers who want to pay cash will pass away long before the younger ones who have grown up using card to pay for everything. All hackneys need to move with the times.”

Ian Poland said: “Cash will be obsolete in ten years. Had a reader for five years now and take about 70% card payments since covid. Money goes into my bank the next day, what more do you want.”

Those against the move to mandatorily offering card payment options mainly expressed the view that it should be taxi driver’s choice to accept or not. Cabbie Jamie Barr said: “It’s their (cabbies) choice. Why should they be forced to accept the cost of credit card machine infrastructure and the cost of transactions.”

What could be done to help the taxi industry move to a fully mandated card payment offering?

The cost of the payment solution provider is the big factor for cabbies and there should be more wiggle room from licensing authorities to use the provider of their choice. For example, does the PIN pad need to be wired up directly to the meter? Not now in this digital age. Handheld devices are commonplace for most mobile retailers and services now.

Taking card payments is now a standard modern-day service through the transport network. Fulfilling passenger requirements and expectations will increase work levels over time and help compete against digital ride-hailing firms. As a rail passenger I know that I can pay by card anywhere in the UK to use their services, why should the taxi industry be any different in the 21st Century?