Credit cards in D.C. taxicabs by March 30

January 18, 2013

A long, messy push toward universal credit-card acceptance in D.C. taxis is near an end. (Bill O’Leary/The Washington Post)

Updated 2 p.m. with further details and correcting the effective date from March 31 to March 30

Not so long ago, Mayor Vincent C. Gray (D) and his taxicab czar had a dream for this inauguration weekend: Visitors would stream in from across the country, settle in at their downtown hotels and then hit the town by hailing a taxi featuring a brand-new, state-of-the art, credit-card-accepting “smart meter.”

That dream is dead, dashed by a botched procurement process that resulted in the Contract Appeals Board overturning a $35 million contract award to put the new system in the city’s 6,500 cabs.

The matter remains in litigation, meaning there’s no definite progress on the horizon for a standardized citywide smart meter. So the D.C. Taxicab Commission is abandoning the effort and will instead issue regulations next week requiring all city taxis to accept credit cards by March 30, said Chairman Ron M. Linton.

It’s a major shift in approach from city authorities: Instead of a mandating a single system to be used by all cabs, individual taxi owners will now have a choice of which credit card system to use. As for the other features of the proposed smart meter system — including an interactive screen, GPS navigation and “panic buttons” to hail authorities — those will be included in a new procurement, Linton said.

Linton said the decision to allow drivers to choose their own device came in part because technology has changed quickly since the smart meter system was first contemplated.

“A year ago, when we came up with the ‘smart meter’ concept, it was a way to get credit cards and the other kind of technological things we wanted in the cabs quickly,” he said. “We couldn’t say, ‘Do this,’ because where would the drivers go? What would they get? Since then, there are six, seven, eight companies coming in here offering credit card services. … They also are offering electronic reservations, which we want.”

A letter from Linton to the city procurement office says the city’s needs have “significantly changed” in the past year and “no longer merit or require the use of a single, integrated, hardware-focused meter system.” Those needs now “can be addressed more efficiently and promptly using a number of combinations of technology.”

The Taxicab Commission has no plans at moment to pay for the credit-card readers, Linton said, noting that several companies are providing equipment free of charge and making their profit on transaction fees. “We don’t get any sense that there is a cost element here,” he said.

According to Linton’s letter, allowing cab owners to choose their own systems offers “substantially lower costs” than the $35 million contract with VeriFone Systems — which the letter deemed “one of the more expensive … if not the most expensive” approach to getting meters in cabs.

The contract for the rest of the smart meter features, Linton added, will include an advertising component that will pay drivers a “major share” of that revenue. There is, however, another cost, to be borne by taxpayers: Canceling the original contract award with VeriFone will likely involve a monetary settlement, he said. A lawyer for the company did not immediately return a call for comment.

Update, 5:15 p.m.: A lawyer for VeriFone, Richard Moorhouse, declined to comment.

Mike DeBonis covers local politics and government for The Washington Post. He also writes a blog and a political analysis column that runs on Fridays.
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Mike DeBonis · January 18, 2013