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D.C.’s move to install credit card readers in taxis is on hold as competing companies contest the contract for the devices. We update the overhaul of D.C.’s aging taxi fleet and ask how quickly riders will see the improvements.
- Mike DeBonis Reporter, The Washington Post
MS. REBECCA ROBERTSFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your community with the world. I'm Rebecca Roberts sitting in for Kojo. Whether you're a lobbyist zipping from K Street to Capitol Hill or a tourist riding from air and space to the Kennedy Center, hailing a taxi and paying for the ride should get a little easier, thanks to the biggest overhaul of the D.C. taxi system in decades.
MS. REBECCA ROBERTSIn July, the D.C. Council approved a series of technological and ecological improvements intended to modernize the city's aging taxi fleet, taking older taxis off the road, adding more fuel-efficient vehicles and maybe even painting all taxis the same color to create a uniformly recognizable fleet. But the rollout of one new measure, credit card readers in every taxi, has stalled over a contract dispute.
MS. REBECCA ROBERTSAs the city awaits, an administrative law judge's decision in the dispute will explore how soon riders will notice the long-awaited improvements in the city's taxi service. Joining me here to discuss it is Washington Post reporter Mike DeBonis, who has an article in today's metro section about the credit card reader snafu. Welcome to "The Kojo Nnamdi Show."
MR. MIKE DEBONISThanks for having me.
ROBERTSSo tell us exactly what's going on here.
DEBONISSo the D.C. Council earlier this summer passed a reform package, and among the many things it addressed is the one thing that every -- that I'd say most -- that's the number one complaint of taxi riders in the city, why can't I use a credit card in my cabs? Well, part of this package was that the city was going to solicit a contract to basically pick one company to put meters in all the cabs and this -- they would set up a system that would all be integrated.
DEBONISAnd we would basically be guaranteed that you have in the cab a credit card reader and a device that does a number of other things. Unfortunately, government contracts or government contracts and this is a particularly big government contract and the people who were all pursuing it sort of disagreed with the way that the city ended up awarding the contracts. So that is now tied up in a contract appeal, which is not at all unusual in -- for a government contract, particularly one of this size.
DEBONISUnfortunately, for cab riders, the -- that means it's going to be at least a couple of months and perhaps a lot longer before we start seeing these devices in most -- in, you know, eventually all D.C. cabs.
ROBERTSSo it's a city contract so that every cab has the same...
ROBERTS...process rather than each cab company getting to...
ROBERTS...install the method of their choice.
DEBONISRight. Which is what the cab -- a lot of the cabdrivers and operators said, hey, why don't you just let us, you know, go onto the market and see and figure out, you know, and pick something that we like the best. The city decided they didn't want to do that for a variety of reasons. They wanted something that would be easy to roll out and maintain. They didn't want to have to deal with all different operators with different standards.
DEBONISAnd it also ties into a system where they're going to do a better job tracking rides and figuring out where the services where we need improvement and figuring out where cabs need to be. And that's the way they did it, and that's the way a lot of other cities do it. Other cities do it in other ways, but this is the way D.C. decided to do it...
ROBERTSWe are talking with Mike DeBonis about most recently the hold on credit card readers in D.C. cabs, but if you have other questions about taxi improvements, whether you are a taxi driver, a taxi passenger, how do you think D.C. taxis compare with other cities? What would you like to see in the D.C. taxi system? You can join us by calling 800-433-8850. If you are a taxi driver, however, please pull over.
ROBERTSYou can also email us, email@example.com. You can also get in touch us with us through our Facebook page or by sending a tweet to @kojoshow. So just a quick question before I move onto the larger issue of taxi reform, on the timing of this. The administrative law judge has put a hold on this contract for now. When is the decision likely?
DEBONISRight. Well, the lawyers who are handling the case have been told they can expect a decision some time in October, probably late October, so six weeks. You know, basically what I've been told is anywhere from a month and two months. So, you know, it's kind of hard to say with any precision. But if that decision -- if the judge at the end of the day decides to uphold the contract, then they -- what they'll do is they'll basically unfreeze everything. They'll start installing the meters, and then the taxi officials in the city expect that within 90 days of that every cab in the city should be equipped.
ROBERTSLet's take a call from James in Washington, D.C. James, welcome to "The Kojo Nnamdi Show."
JAMESI think you're giving the people the impression that this is some brand-new system that they're trying to bring in such an innovation. Cabdrivers have been using this credit card for over five years. We got over 1,000 cabdrivers. And before I joined the cab company that uses it so much I used to get my own merchant account with my bank. So it's nothing new. The only thing that is new, it is the GPS.
JAMESAnd people are complaining about the GPS. And on here, you're talking about the privacy issue. If you get into a cab right now that uses the GPS or you go to what they call happy hour, they track everything. Do you know what they're going to do with all that information, data 10 or 15 years after that? This is the problems, and the taxicab commission refused to allow the cabdrivers to pass the additional cost of operation when using the credit card.
JAMESSome cab companies are charging their drivers 10 to 15 percent off top. So why should I use credit card, then I'd lose 10 to 15 percent of my money instead of using or just taking cash? The taxicab commission has to authorize that, but they haven't done it. Then they go out talking like (unintelligible)...
DEBONISThere's a couple of really great points here, and I'll address them one by one. James noted that, you know, this isn't new that some drivers have had credit card machines for many years. That's true. Some drivers have but not nearly all of them. As he said -- he said about 1,000 drivers. There's 6,500 cabs in the street. So if you take those numbers at his word, that's less than one in five cabs are going to have a credit card reader.
DEBONISAnd part of the thing is the uncertainty. Like if you go out and you want to rely on a cab to get home, you -- right now, if you're a taxi rider, you cannot -- well, you'll have to make sure you have cash to get home. You cannot rely on the fact that that the cab you hail on the street is going to have a credit card reader. The new law does, you know, bring in, you know, that certainty that if you go out and you can rely on having a cab with a credit card function on the way back.
DEBONISThe second part is the GPS, and, yeah, that is something that really has stirred up a lot of questions from drivers in particular. Part of this is, yes, there's a GPS thing, so there's a navigation feature. So the rider can...
ROBERTSAs part and partial of the credit card reader?
DEBONIS...see where they are. Yeah. There's a console on the back, and you can see where you are on a map. The driver can see a map. You can navigate via the map. And from the rider's perspective, it sort of takes away that sort of uncertain feeling that, you know, you might be getting taken for a ride, you know, pun intended by a driver. But there's also this tracking feature, which I mentioned before.
DEBONISFrom the city's perspective, they want to see where the cabs are. Are they clustering in one particular part of the city, what is the supply of cabs that are in the outlying parts of the area? Because it's one of the biggest complaints, especially with the politicians here on repeat as this debate goes on is that my constituents who are out in the farther flung regions of the city can't get a -- can't hail a cab on the street, and they're finding it hard to access cabs.
DEBONISSo they want to sort of gather data and figure out what is the situation, what can we do to fix it. However, that has led to this privacy concerns that cabdrivers say that they're going to be tracked, and that riders should be concerned about their privacy as well. That's something that the taxicab commission has addressed, that the D.C. Council has addressed that, you know, there will be data on rides, saying, you know, when and where there was -- someone was picked up and dropped off, but it's not going to be tied to individual personal data.
DEBONISYou know, the credit card transaction information won't be logged alongside the trip data. And, you know, except, I think, in a police-type situation, they won't be able to go and look at individual rides. It's more about an aggregate sort of look at the industry.
ROBERTSAnd what about James' point about the cost of taking credit cards and passing that onto riders?
DEBONISAs it said, you know, the credit card readers that are in use now that most of them take an off-the-top fee. He said 15 percent. Others are less. I know that some are in the 8 to 10 percent range, but that's true. But the new meters, you know, the drivers keep every dollar. The company makes their money off the selling advertising, and, you know, they're getting paid by the city, $35 million over, I believe, five or six years to roll the system out.
DEBONISAnd the city went out of its way to go and cover the installation costs for the drivers. So drivers aren't, as it stands, won't have to pay out of pocket to install the system. They don't get credit card fees skimmed off the top when they're used. And another, you know, and this has been backed up by data, you know, lots of data and other cities where credit card readers have been rolled out is that when you have a credit card transaction, people tend to tip better.
DEBONISAnd people just in their -- not only that, but people just take cabs more often because they don't have to worry about the fact that they don't have enough cash. And, you know, in a lot cities, drivers have reported seeing their incomes rise even after taking into account the credit card charges.
ROBERTSLet's take a call from Jeff in Washington, D.C. Jeff, welcome "The Kojo Nnamdi Show."
JEFFThank you. Good morning. Rebecca, I just came from a place that I think you know pretty well, San Francisco...
JEFF...where the cab system is terrific. And I was wondering if when the city council started formulating its rules if it looked at systems in other cities.
ROBERTSI'll let Mike answer that question, but, Jeff, I got to tell you after living in San Francisco for 10 years, I hated that cab system. You could never get a cab. You couldn't...
ROBERTS...hail on the street.
JEFFThey've improved it in a big way. You can sign up and dial 333. They'll track where you are. They know who you are. And they come within 10 minutes.
ROBERTSOh, good. Then my information is outdated because it used to be a disaster.
ROBERTSSo Mike has...
JEFFI remember that.
ROBERTS...D.C. looked at making improvements like San Francisco has?
DEBONISSure. And certainly, they looked at different cities and what they've done. I mean, obviously, in D.C., I think the one city that everyone benchmarks is the taxi service in New York because everyone sort of goes to New York at one time or the other and takes a taxi. You know, there, you know, you have, you know, taxis that are all the same color. They have these devices that have credit card readers and video screens.
DEBONISAnd that's certainly, I think, was in people's minds as a sort of baseline level of service. You know, there are some definite differences between D.C. and New York and the way that the industries operate. But I think in terms of the service and the type of service, you know, that's something that was looked at. And there's other cities that are more in, you know, D.C.'s size and peer group. You know, Boston recently I think in the last two years went, you know, mandated credit card meters.
DEBONISSan Francisco is in sort of in that group. And, you know, these are things they looked at. You know, one thing that's unique about D.C. and, you know, like Jeff mentioned, and your response to Jeff saying that there just weren't a lot of cabs in San Francisco. San Francisco, I believe has a medallion system where there's a hard cap on the number of cabs, which isn't the case in D.C. D.C. doesn't have a hard cap.
DEBONISThere's, you know, more cabs per capita here than any other city in the country, you know, and that has sort of complicated the economics of it. It's totally easier to finance improvements in cities with medallion caps 'cause you can use that as collateral, as equity to finance improvements.
ROBERTSWell, also you don't have cab driver's scrapping for every little margin of profit...
ROBERTS...because the supply and demand evens out a little bit better.
DEBONISYeah. You know, I mean, that's true here. I mean, you know, the upside of the market here is that there are more cabs. I mean, there is more, you know, but you're right about scrapping of, you know, the margins are less here. It can be tough on a driver. For the riders, it's good because it means that you can, you know...
ROBERTSYou can usually get cab…
DEBONISYou can usually get cab in your neighborhood...
ROBERTS...depending on what neighborhood you're in. Yeah.
DEBONIS...depending on what neighborhood you're in.
ROBERTSLet's take a call from Phil in Montgomery County. Welcome to "The Kojo Nnamdi Show," Phil. Phil, are you there? I'm afraid we have lost him. Let's try Eileen in Washington, D.C. Eileen, welcome to "The Kojo Nnamdi Show."
EILEENHi. Thank you very much and thank you for the show. I have a question. I am a 40-year resident of the District of Columbia. I live on Connecticut Avenue near the zoo. So it's about 3000 Connecticut Avenue. For so many years, I was able to take a taxi from 3000 Connecticut Avenue to Union Station for approximately $10, $11, $12 and then I would leave a nice tip, et cetera.
EILEENTwo weeks ago, I took a taxi to Union Station, and it was more than $20 just for the basic fee because it happened to be during rush hour. And so what I find is that now with the meter system as opposed to the old zoning system, every time the taxi stops, the meter keeps running.
EILEENHave you all thought about that? I don't care whether we use credit cards or cash.
EILEENThat's not my issue. And that's wonderful. If you can incorporate credit cards, that's fine.
EILEENBut this a very, very much more expensive system, and I don't hear anybody talking about that.
DEBONISThe, you know, just to remind everyone, D.C. just went from a zone system to a time-and-distance meter system four years ago. So, you know, meter -- time-and-distance metering is relatively new to the city and to people like Eileen, who have been here for many years. You know, it's taken, you know, people either have taken some time to get used to it or just still have not gotten used to it and don't like it.
DEBONISThere are definitely some rides that are now more expensive than they used to be, and there are some rides that are less expensive than they used to be. I can definitely see why Connecticut Avenue to Union Station, which I think was two-zone ride then, would've been cheaper than it is now. I mean, especially across town at a -- during rush hour, you'll be spending a lot of time in traffic. And it is time and distance meter, meaning time stopped, I believe after a certain threshold, the meter does run.
DEBONISAnd, you know, there was a tradeoff, you know, that that was, you know, discussed in 2008 when we went from zones to time and distance meters. But people generally have or are pleased with the change. They like the time and distance meter versus zoning. I'm basing that on a Washington Post poll that we did earlier this summer. And there's definitely a pretty sizeable minority of people who do not like the new time-and-distance system, though.
ROBERTSLet's take a call from Tec (sp?) in Washington, D.C. Welcome to "The Kojo Nnamdi Show," Tec.
TECHi. Thank you. Thank you for inviting me, and I think it's a great show.
TECI do have a question to the gentleman. Why do we have to get a credit card machine from the government when we can do it on our own? You know, I don't trust anybody to control my money, and I want anything that I make to go straight to the bank instead of waiting for somebody to send me a check and put it in my bank. Why do we have to wait for that? Or why do we have to ask the government to do that for us?
DEBONISGreat question. I think if you had the policymakers in the room right now, what they would say is, the private cab industry had years to figure out how to do this themselves, and they didn't do it. So, you know, we're responding to a demand from the customers, the riders and the cab industry that want credit card readers in every cab. Now, the question is can you -- is there a way to have -- to pick a, you know, two or three different system to choose from and then, you know, have the drivers pick among those?
DEBONISYes, there is. And, in fact, in Boston, that's what they do. I think they have two or different -- two or three different systems that the drivers can choose from. But what they decided here is to do is just do one contract. Part of the advantage to that was that, you know, that there is no cost to the drivers. There's no per-swipe fee or no percentage fee. The other advantage is that it's simpler in terms of the administration and simpler in terms of integrating with city's needs to sort of get some data on what the system is.
DEBONISI haven't heard too many details in terms of the banking aspect of it, how the money will flow from the system into drivers' accounts. And over there, they're going to have to get accounts with a specific bank. I'd be interested in hearing more details about that.
ROBERTSWe are almost out of time. But I want to get to this email from David in Washington, who brings up the competition from Uber, which is -- I'll let you explain what Uber is. But he says, "It's friendly, clean, on time, takes credit cards, a little more expensive, but you don't have to deal with the fighting and ugliness of cabs in the city." He said, "I've had at least 50 cabs refuse to take me where I want to go. I'll just use Uber."
DEBONISThat is illegal. Cabs cannot refuse to take you where you want to go, and that is -- unfortunately, there are certainly drivers who object when you get in their cab and say you want to go somewhere. And Uber does not do that. What Uber is is a service that contracts with limousine drivers. It's a dispatch service based on smartphones and there's an app, you say where you want to go, when you want to go there.
DEBONISYou press a button. It sends a message to the drivers who are on the road. They accept your offer and then come pick you up. Usually, you know, it takes, you know, 10 to 15 minutes, tops. It's been rather popular. It's gotten a lot of attention, including some attention from the taxi regulators and the taxi industry who were wondering who these guys are and who let them, you know, in our, you know, business. But, you know, the popularity of the product has spoken for itself that there is definite a market for a service that's about half, again, as expensive as a taxi ride.
DEBONISBut it's reliable. There's, you know, a smartphone-based dispatch system and you get more of an upscale limousine-type ride like town car rather than a standard cab. And so, you know, right now, in fact, today, the D.C. Taxi Commission is taking some testimony about Uber later this month. The D.C. Council will be hearing from Uber and its fans and its opponents and decide how exactly they're going to be regulated, if at all, more than they are now. So that'll be definitely something to keep an eye on, something that the taxi industry is certainly keeping an eye on.
ROBERTSThe Washington Post reporter, Mike DeBonis, thank you so much for coming in.
ROBERTSWe need to take a quick break. But when we come back, Stephanie Vance on how to be your own best lobbyist. Stay tuned.
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