What’s making news in Minneapolis, reported by the Star Tribune’s team of city reporters. Send news tips to suzanne.ziegler@startribune.com.

Council passes taxi cab credit requirement

Posted by: Eric Roper under Local business Updated: January 13, 2012 - 11:28 AM

No cash for the ride home? No problem, as of June 1.

The Minneapolis City Council voted Friday to require taxi cabs in the city to accept credit cards starting this summer. The new ordinance, which passed on an 11-2 vote, was spearheaded by council member Gary Schiff.

Schiff expressed concerns about the number of people who are left stranded late at night because they don't have enough cash. Opponents, including the Taxicab Drivers and Owners Association, said it would be a financial burden on taxi drivers who have to pay the bank fees.

"We should be worried about being a hospitable city that allows the easiest way possible for people to get around," Schiff said. He added that research in other city's shows taxi tips increase when credit cards are used.

Yemane Mebrahtu, president of the Taxicab Drivers and Owners Association, said the taxi companies which pay the bank fees often pass along higher costs to the driver. That can amount to a fee of 5 to 7 percent that is passed to the driver.

Since the metered rate is fixed, drivers can't make up the cost by hiking prices.

"The credit card issue boils down to the point that any fee that adds to the driver automatically undermines the meter rate," Mebrahtu said. He added: "We're not opposing the credit card. But the question comes who pays the fee?"

The votes was initially scheduled to take place last year, but was delayed as city officials analyzed whether the fee could be split between the customers, the driver and the companies.

Schiff said Friday that they discovered the city does not have the authority intervene in the drivers contracts or require a surcharge on credit card purchases.

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