Dear PoPville – Are Taxis Allowed to use ‘Square’ Credit Card Readers?

IMG_0046-e1381330242186

“Dear PoPville,

The last two times I’ve taken a cab, the driver has had a built-in system as well as a Square. In the latest one, they had one of those great NYC-style video systems in the back, and the system appeared to be working normally, but when it came time to pay, the driver pulled out his cellphone and swiped my card on Square. I asked for a receipt and he gave me one of the old-style paper slips.

I assume this is a tactic to avoid reporting fares–claiming the square income as “cash” perhaps–and I’ve heard that taxis are not permitted to use square as their credit card system. But is there any good reason for me to insist on using the built-in-system? Have other people encountered this?”

62 Comment

  • If they take credit cards, I don’t see what the issue is. They might be running afoul of the law, but you aren’t going to get a ticket or go to jail. Personally I’m ok with 8,000 cabbies lying on their taxes if it means I get to pay with a credit card.

  • Personally, I wouldn’t trust it. The built-in credit card system is tied to the meter (right?) so the cabbie cannot manipulate the amount charged…

  • I took a taxi ride a few days ago and asked to pay with a credit card. He had one of the new machines set up. The cab driver asked if it was possible for me to pay cash instead. He explained that, instead of paying them on a daily basis and immediately depositing cash, that whatever company it is had withheld substantial payments. He muttered that a group of cab drivers were looking for legal counsel to take action.

    I have no idea the veracity of this, but it wouldn’t shock me if the new system is not particularly conducive to cab drivers getting funds in a timely fashion.

    • I’m amazed at how many of these brand new credit card machines don’t work. I’ve used a cab 8 times in the last week. 2 had no problems with credit cards as payment, 3 said “You pay cash”, 2 didn’t even have a credit card machine installed, and 1 bitched about how he only gets his money every 30 days when he takes credit card as payment. I told him “I get paid every 30 days too, tough shit.” Oh, to be a cab driver and get paid every 15 minutes.

      • They average $250 a day in fares, and have to pay about $150 of that for gas and various fees. You can see how if you only take home $25k a year, fronting thousands in gas money might give you a little cash flow problem. Personally, I’d rather have my office job.

    • I’ve seen a lot of these readers and the ones attached to Iphones. I was wondering if it was as sketchy as it looked and a little worried about the potential for credit card fraud. Not many cabs seem to have gotten the integrated card reader where the passenger can swipe their own credit card.

      And I’ve heard the same complaints from a lot of my cabbies. It sounds like the credit card company is taking 4 weeks + to pay out and crimping their cash flow. I’ve mostly been using Hailo and MyTaxi for cabs lately. Since they allow you to pay directly via the apps, I wonder if it causes the same problems?

    • saf

      Several of the companies are being VERY slow on payments.

      I used to be a waitress. I try very hard to pay in cash, and always tip in cash. People assume it is because I want to let them cheat on taxes. No. It is because I want them to get the money, and I have worked in places that takes weeks to get you your card tips, and places that will take fees out of your card tips. Meanwhile, you have to tip out at the end of the night on the full value of your tips, cash AND credit.

      Cabbies, same thing. You get your money late, and less the fees. Not fair.

  • Thank god Car2Go has completely replaced taxis for me. I don’t want to deal with any of this crap.

  • Yeah… I think the broader issue is really that the taxi system still just totally sucks in DC.

    Why can’t we just copy New York’s program. Everything about it. Every single thing.

    • Including driving tactics. DC cab drivers are timid.
      Unless of course they are u-turning into/across bike lanes.

      • You must not be from around here.

      • DC cab drivers are some if the most idiotic taxi drivers (or any kind of driver) in the world. Every other one I have yo lecture how to drive and to step on the gas! NYC cabs are way better because they are aggressive and actually know where they are going

      • “Timid”?? I’ve heard many criticisms of D.C. cabdrivers, but I never anticipated that one.

  • Technically, Square isn’t allowed. The city didn’t certify Square, so taxi drivers can’t use it.

    I’m not sure that the driver was trying to dodge taxes. There’s still an electronic record of the transaction, and as far as I can tell, if you want to avoid taxes, you don’t do anything electronic. More likely was that he was trying to avoid the fees. Drivers say that all of the city-approved credit card systems have huge fees associated with them, compared with Square.

    The issue from the city’s perspective, I believe, is that Square doesn’t link directly to the meter.

    • Exactly. From what I can tell the onboard credit card system doesn’t pay out as frequently as services like square.

      This is one of the few things I do actually feel bad about for cabbies. If square works perfectly good for them why can’t they be allowed to use it?

      • My issue is that I hate when they lie to me about it. I’ve had several cabbies who clearly have working installed systems that either tell me it isn’t working and I have to pay cash, or instead use the Square device. It seems clear to me that it the installed one is working fine. It’s one, greets me, I can watch the fare increase as they drive and so on.

        I’m honestly just sick of hearing them rant. This has been on the agenda for years. Years. They have had years to prepare for this. It is ridiculous that we are fighting over whether cab drives need to install working roof signs and credit card machines. Get over it.

        I almost exclusively take Uber X everywhere now. So much cheaper and the cars are not huge piece of crap.

  • there is no way they cannot report the Square income. Square will have to report the money paid to the cabby, therefore the cabby will have to report it on his/her taxes.
    The only way the can really get away with not reporting income is by getting paid in cash which is why most of them were protesting the move to accept credit cards to begin with.

  • The machines installed by the taxi commission subtract 45 cents per transaction (10 cents to taxi commission, 35 to company that installs the machines) plus 3.5% of the total fare. They cost $280 out of pocket to install. Mainstream competitors offered machines with free installation and a 0.75% fee in perpetuity, but somehow the taxi commission decided this was a worse option than their crony’s company. Of course – taxi commission (and systemic problems) are not one and the same with taxi drivers.

    Square, and other devices, charge much less. It’s not about dodging taxes – you have to register as a business to use Square.

    I think it’s less about taxi drivers trying to rip anyone off (you or the government) but instead making rational decisions for their own well-being. We all do it.

    Would be nice if commentators on here could manage slightly more nuanced views instead of stoking up utter disdain for people in service industries serving them.

    • I didn’t have to sign up as a business to use square free of charge.

      • yeah i have one incase i go out to dinner with a large group and someone doesn’t have cash on them… can pay me with credit card

        • careful, if you do that more that 200 times in a year, Square will report it to the IRS ;) and there goes that 1040EZ out the window.

          • If you’re going out to dinner with a group of friends 200 times a year then you probably have enough money that someone does your taxes for you already.

    • Teamster Representative?

    • I agree with everything you said.

      DC taxi industry STILL sucks, for whatever reason. It’s a fact.

      We gotta do better!

    • This. The Taxi commission picked a substantially worse system than what’s available on the open market; Square is a much better deal from the driver’s perspective. It takes a smaller % of the transaction and pays much more reliably.

      • Technically, they picked eight systems the cabbies could choose from. But I don’t think they should be in the business of choosing and certifying credit card readers. I think they should set some standards that align roughly with what vendors and other cities are doing, and leave it up to the drivers to pick any system that meets those standards.

    • Except that the ones chosen – out of 8 – are tied to the meter. Square is not tied to the meter. That is the reason it was not allowed.

    • ah

      At least now taxi drivers will know how all the drivers using ParkMobile, with the usurious fees, feel. Another win for DC contracting!

    • Being in a service industry does not give cabbies the right to demand cash instead of credit cards (the law). Grow up.

    • Thank You! I agree. I think the taxis should be allowed to use square or many of the other similar services. As I understand, the taxi commission only certified 5 credit card readers companies and each of them take a large chunk of the driver’s profit. The taxi drivers were also forced to purchase all of the extra equipment. Square is a much better service and gives more money to the people providing the service for all of us to use.

  • Cabbies are complaining about not being paid immediately? Pretty sure most people get paid either every 15 or 30 days. Playing my violin for them.

    • Show me a job where you only get paid once a month

      Every 2 weeks or bi-monthly is the standard.

    • ah

      In a salaried job, with probably limited business expenses you pay yourself.

      Cabbies are paying for their own gas and maintenance, and aren’t exactly guaranteed a payment every 2 or 4 weeks.

      I’m about as much The Man and a free market guy as their is, but I understand how moving from a system where you get cash payments constantly to one where you don’t get paid for 30 days to be a bit jarring.

    • Once a month here as well. Perhaps you’re not as familiar with how people are paid as you claim.

  • I use Uber because the cab system in DC is horrible

  • They use square because the fees are less and the payment is quicker. Personally, I don’t care one way or the other which system I use to pay them as long as a credit card is accepted. I’m not worried about credit card fraud. They have built-in zero liability limits for fraud, and when you think about it you hand your card over to waiter or the guy at the gas station or whatever a dozen times a day, so a cab is no more risky than what you’re already doing.
    .
    Overall, though, I’m getting increasingly pissed at cab drivers who just LIE and say “oh, my brand freaking new credit card machine is broken – cash only”. I’ve called a few of them out on it and said that they were liars and that THEY personally were the reason why people were leaving the cab industry to go to Uber. They get super defensive when you tell them they are why people are running to the competition in droves, but oddly they never deny that they’re lying to you about the credit card reader being broken…

  • Report it any time a cab driver tries to give you the old paper receipt. They are not allowed to do that any more.

    • They may not be allowed, but they almost always do this. It’s because folks who need to reimbursed for the fare + tip need a receipt that reflects this. Those paper receipts are still widely distributed by the cab companies. They’re doing it for the customers — and will give you both if you ask — so I have a hard time complaining.

      • +1. I can’t tip if it changes the amount on the receipt. heck though, I hate tipping cabbies, their prices go up every freaking day anyways.

  • why isn’t everyone using Lyft yet? it’s way cheaper than taxis and works through your phone just like uber. plus you get to sit in the front seat and have pleasant conversations with a normal human being. cabs are for suckers!

  • Square charges cabbies a 2.5% fee while the companies charge 5%. Square also automatically deposits the money, while cab system holds it for a while. This isn’t about avoiding taxes, this is about getting paid what they deserve.

  • This happened to me too. The driver had a handheld machine up by his seat and I had to give my card to him to swipe. This made me uneasy with this unauthorized machine, like how do I know he’s not storing my cc number?

    • Every time you use your credit card anywhere your number could be stored.. automatically or just written down. There’s absolutely no difference. You are not held liable for CC fraud, thankfully.

  • Haha, this is great! Only in DC would I expect to see this. Just needs some duct tape and rubber bands to complete this beauty.

  • The problem is there is no accountability for DC cabs. Where are the hack inspectors? They couldn’t get away this crap in NYC because the hack inspectors are ruthless, everywhere, and they’ll fine your ass! Funny how when the accountability is consistent, cabbies would much rather pay the inconsequential operating fees (the costs of doing business as a cab driver) vs. paying thousands of dollars in fines because you wanted to risk breaking the law. Get the hack inspectors out there to get these cabs in check. Just start fining the maximum penalty! That’ll go a long way toward reversing their little race problem too…

  • Two solutions here folks:

    1. CASH
    2. UBER

    Please go ahead and rant on about Option 1. I know how difficult it is to find an ATM in the city ;)

Comments are closed.