Taxi cab drivers were at the San Francisco Board of Supervisors this week pushing a resolution to relinquish five percent fees they pay when customers use a credit card to pay their fare.” Five percent?! Square (credit card system for iPhones/iPads) charges 2.75% per swipe. I’ve talked to taxi drivers about the issue and and thought a bit about the overall system. Certainly this is a cursory look -- cab politics are incredibly complex -- but I see two approaches:

Inside the system

Negotiate with the evidence. The going rate is apparently lower then 5%. Keep the technology that the cabs already have, but renegotiate in light of new competition that has dropped the pricing to 2.75%. The cab companies may argue the other 2.25% should be theirs for the upkeep of the in-car systems. There may be some truth to that, so perhaps the value of the in-car system is a bit more than 2.75.

Outside the system

Cab drivers sign up for Square (or the mobile service of their choice), explain the situation to their customers and offer to let them run their cards through the mobile device. There may be some customer push-back given the in-car system is sitting there and it may feel odd to then use a mobile device version. In San Francisco I suspect the patrons will understand the situation and know enough about mobile devices that this will be ok for many. Cab drivers then have to come up with the cash at the end of the shift to cover those fares. Point of sale via mobile device is becoming common. We see it in stores (e.g., Apple, Sephora), we see it with small vendors (pic below is from the doughnut shop in San Francisco’s Ferry Building), and we are seeing it with car services. Negotiating changes will require gaining customer confidence, adjustments to the available technologies at the point of sale (review of ten iOS point of sale tools), and major shifts to the already complicated payment systems organizations have integrated into their processes.

Hoping there are some drivers out there who can chime in. I know one driver in Chicago who is an expert on the technology issues (we had a great talk on the way to ORD), bet there are some experts in SF as well.