Nobody likes change. It seems that everyone looks at the problems with change rather than the opportunities. Such was the case with taxi drivers in New York City (NYC) when they were ordered to add credit card machines to their cabs two years ago. All they saw was the added five percent card processing fee and another hassle. In the end they were surprised and some cabbies are singing a happy tune on their way to the bank.
What was the big surprise? Tips. Yes, tips.
Tips are way up! Way up! Taxi drivers are making more money now than ever.
It seems that these new credit card machines have special tip shortcut buttons on them that can be set for a percentage (15 percent, 20 percent or 25 percent) or for a flat fee ($2, $3 or $4).
Passengers are far more generous when paying by credit card and having the buttons to push seems to be a suggestion for the proper tip, rather than a rough rounding up to the next even dollar amount in the old days.
How many passengers feel like cheapskates when the push the lowest tip level? Probably a lot. It’s human nature it seems, so tips are rising.
In the old days if the taxi fare was $3.50 most folk would add 50¢ and say, “Make it $4.” With the new machines even if a passenger decided to push the 15 percent tip button the taxi driver would make more and most passengers seem to be pushing the 20 or 25 percent tip button (in some cases, there isn’t even a 15 percent option).
The New York City Taxi and Limousine Commission (TLC) notes:
Currently, there are three technology vendors that provide options in percentages or dollar amounts dependant on the total fare. For the particular vendor that you highlight [in the image above], the system offers tip amounts in dollar increments of $2, $3, or $4 in cash for fare amounts that total under $15.00. If the fare amount surpasses the $15.00 fare, then the option transfers into percentages at 20%, 25%, and 30%.”
Is 20 percent the normal amount to tip a taxi driver? When did that become normal?
The taxi drivers are learning to love this system because of higher tips, but there is still some grumbling because tips were “off the books” and therefore non-taxable in the old days. Drivers still aren’t totally sure whether the increase in the tips is going to make up for the ability of authorities to tax the now-reported tips. Time will tell.
In the meantime, riders “interested in filing a complaint” can call (212) 639-9675, or 311 within New York City.
Have any readers experienced taxis that take credit cards? The system has been in place since 2007 in New York, though I’ve only paid with cash. Cabs with credit card machines have been used in Europe for years.
Charlie Leocha is the President of Travelers United. He has been working in Washington, DC, for the past 14 years with Congress, the Department of Transportation, and industry stakeholders on travel issues. He was the first consumer representative to the Advisory Committee for Aviation Consumer Protections appointed by the Secretary of Transportation from 2012 through 2018.
