In the few years I’ve driven a taxi, I’ve witnessed the evolution of the typical cab customer: from the old standard of cash-paying clients, to plastic paying ones. The cabbie’s hatred of plastic has cast a negative shadow on the industry. A fare is a fare, and all cabdrivers should happily accept your credit card (I don’t care how my customers pay me), but I think it would be helpful to understand why paying with plastic can break your cabdriver’s heart.
A cabdriver’s operating costs are around $50,000 or more each year, assuming they are a legal, licensed and insured business. Broken down, that would be about $20,000 for gas, $26,000 for the cab lease, and rest is miscellaneous ( car washes, city licenses, and out-of-pocket upkeep). Assuming a cabbie works 6 days a week, 52 weeks of the year, he or she will have to earn over $160 a day just to cover operating expenses. So next time you cringe as you watch the meter climb, know that there are real costs behind that meter.
We get paid in three ways:
- Accounts- a medical or corporate customer signs a contract directly with a cab company and is billed for runs served by that cab company’s drivers. Often, because the client is essentially purchasing rides in bulk, they are given a lower mileage rate and offer no gratuity to the driver. When the cabbie accepts one of these fares, no cash changes hands; instead, the cab company will apply this amount owed to the driver towards the cabbie’s lease. In the event that the fares from these rides exceed the amount owed on the lease, the cab company will issue a check to pay that different. But not always in a timely fashion. Meanwhile the cabbie still needs to put gas in his taxi and food on his table.
- Credit Cards-when a customer pays with a credit card, a %5 service fee is taken right off the top, the cab company applies these credit card charges to cover the lease (which can be $500 to $600 per week), and, if there is anything left, the driver will get a check, sometimes immediately, sometimes not.
- Cash-when a customer pays cash, the cabbie has enough money in hand to pay his or her lease, put fuel into their cab, and not have to worry about having enough cash to make change for other customers, or have to wait for the cab company to get around to cutting them a check.
With certain cab companies not paying their overages on account customers, and with banks taking 5% off the top, that leaves the driver with fewer resources to meet the bare-minimum of their operating costs, much less to pay their bills. Keep this in mind the next time a cabbie looks deflated when you offer your credit card in payment. For me it’s all the same, but I’m not fare to fare like some.
At the end of the day, all cabbies are in the service-industry, which means we need to offer what our customers want in order to be successful, but my advice to people is that if you liked your driver, had good service, and can pay cash, you should do it. I’ve also observed cabbie behavior long enough to have seen that cash paying customers get better service, and get cabs quicker. Cash paying customers are worth their weight in paper-gold.