Cab drivers look to mobile payment for credit card processing

TWP - July 13: Taxi's lined up by Union Station on July 13, 2012 in Washington, DC.

Grand Cab Co. driver Kalechristos Jima has been driving in Washington for 15 years. He works Thursday, Friday and Saturday nights, usually carrying 10 to 15 passengers a night.

Jima thinks he’d get significantly more business if he had a device to process credit cards. Every night, potential passengers turn him away because they don’t have cash, he said.

Not accepting cards has created “some kind of animosity between the rider and us,” Jima said.

Early next year, Jima will join a small group of D.C. cab drivers accepting credit card payments on their smartphones. He recently signed up for the German smartphone app myTaxi, which allows customers to book cabs and pay for rides using their credit cards.

The company will soon distribute credit card readers — to be attached to the drivers’ smartphones — so they can accept payment from any riders they pick up, even if they’re not myTaxi passengers. MyTaxi drivers are currently charged 2.75 percent of each transaction, and the same will apply for credit card transactions.

Mobile payment systems may be drawing more interest in the D.C. market after a city plan to install credit card-reading meters in all District cabs was put on hold indefinitely in November. Jima said he and a few other drivers from the Grand Cab Co. signed up for myTaxi after the plan was tabled.

Even if the city implemented its own credit card system, Jima said he’d prefer smartphone payment because it doesn’t require as much installation. Traditional card readers — such as those in New York and other cities — are often built into the car’s body. “You cannot even sell your car later,” he said.

So far, Jima said myTaxi’s dispatch system has proven to be just as valuable to him as the credit card reader.

“It’s the dispatch system that brings more people, and more people can pay through any kind of payment,” he said.

Jima estimated that five out of 10 people he takes on a given night find him through the app’s taxi dispatch system. Though the company won’t share exact numbers, hundreds of D.C. cabs use the service.

MyTaxi — which launched in D.C. in October — has a handful of competitors offering mobile payment options, including Uber, a sedan service riders can book through a smartphone..

Square, a San Francisco mobile payment service, piloted a credit card payment system in New York City cabs earlier this year, but doesn’t have any other city-specific efforts, though thousands of individual taxi drivers across the country use its device to process credit card payments, according to the company.

A handful of local cab drivers who use Square advertise their availability through the start-up’s online directory, though it doesn’t have a dispatch system.

D.C. independent cab driver Ameed Khan is part of the myTaxi fleet, but also uses Square on his iPhone to swipe customers’ credit cards. He’s charged 2.75 percent of each credit swipe transaction through Square, but thinks the fee is worth it because it brings him approximately 20 percent more business than when he only accepted cash, he said.

Khan started using Square three months ago, and has since introduced the system to some of his friends who drive cabs.

Though Square has brought him more business, Khan said it’s hard for individual cab drivers to advertise the fact that they accept credit cards.

“Not as many people know we take credit cards. There’s a possibility that we’re losing business because they’re calling cab companies they know accept credit cards,” he said, citing Red Top Cab, based in Arlington.

Khan crafted a small sign for his car advertising that he was part of the myTaxi fleet, but has yet to make a sign for Square because he’s not sure what to write. “I would prefer a sticker to put on the outside of the cab,” he said.

 
Read what others are saying