Several hundred taxicab drivers at the Minneapolis-St. Paul International Airport are upset about new rules overseeing the way credit card payments are processed for cab rides.
The requirements are part of a new regulatory framework adopted by the Metropolitan Airports Commission (MAC) last year as upstart ride-sharing services such as Uber and Lyft have grown increasingly popular with travelers at MSP.
The MAC now requires taxi companies to mount a credit card reader in the back of every cab, which the commission claims is a more secure method of payment. But cabbies say fees associated with these readers deeply erode their income stream — already hurting due to fierce competition from Uber and Lyft.
“To impose this is unfair,” said Cowami Di Senard, a cabdriver with Airport Express Super Taxi. “We can’t lose more than what we’re losing today. I’ve already lost 30 percent of my business. It’s too much.”
More than 374 airport taxi drivers signed a petition that triggered a public hearing last week. “It’s like they don’t want us to make money,” said Muluneh Belai, a cabdriver for more than 20 years.
Drivers say the credit card readers charge a 7 percent fee for each transaction, plus $25 a month, and require a three-year contract with an early-termination penalty of up to $700. They say these fees are passed on to them.
Many cabbies prefer to use a popular smartphone accessory for credit card payments called Square, which charges a 2.75 percent fee for each transaction. Users swipe their credit card through a cube device, then sign on the phone’s screen. Receipts are delivered by e-mail or text.
Based in San Francisco, fast-growing Square Inc. introduced the tiny attachment about eight years ago and is now generating nearly $50 billion in gross payment volume a year.
Some airport taxi drivers already use Square. “People love it,” Di Senard said. “They use it everywhere else already.”
MAC spokesman Patrick Hogan said the commission reached out to 16 comparable U.S. airports while researching the new regulations and found 10 permitted the use of Square in taxis and six did not.
“Our issue wasn’t with Square,” Hogan explained in an e-mail. “We were simply trying to include regulatory language that addressed complaints we were hearing from customers” about taxi credit card payment systems in general.
Those complaints include concerns that systems were not secure, or that customers couldn’t swipe their credit card themselves, Hogan said. Others said receipts received by e-mail or text were incomplete.
The most pervasive complaint, Hogan said, was that once passengers reached their destination, some taxi drivers told them their credit card processor wasn’t working, forcing them to pay cash.
The new ordinance does not dictate a certain model of credit card processors for taxis — that’s left to the taxicab companies. But the machine must be secure, permit customers to complete the payment themselves, and provide an accurate and complete receipt.
Cabbies licensed in other cities use Square. St. Paul does not specify the type of equipment for taxi credit card payments, said Dan Niziolek, deputy director of the city’s Department of Safety and Inspections.
“It is possible that some St. Paul operators may be using Square devices,” Niziolek said, noting the city has not received any taxi credit card complaints over the past several years.
In Minneapolis, some taxis likely have Square, but the city requires the account be linked to the taxi service company and not the drivers, said Grant Wilson, the city’s manager of licensing and consumer services.
John Boit, a spokesman for the Maryland-based Taxicab, Limousine & Paratransit Association, said if the Square account is registered to the cab company, “it is generally OK. But if it’s in the driver’s name, then the problem is that the taxicab company has no record of that transaction.” So if there’s an issue with the transaction, “the taxicab company simply has no record of it, and won’t be able to help.”
The ordinance called for the 787 taxis serving the airport to be outfitted with the new equipment by July 1. Cab companies face a $500 fine, and cabbies, a $200 penalty, if they don’t comply. But Hogan said the rules won’t be enforced until the MAC decides whether to amend the ordinance.