D.C. taxi credit card implementation hits roadblock

D.C.’s infamous cab market, loathed for its inconsistency, is finally set for the implementation of a big improvement that was planned months ago. A new mandate requires all D.C. cabs to install credit card readers by December 1 of this year, though this may take a toll on the District’s 100-plus cab companies.

To implement the credit card readers, cab companies need the services of payment service providers (PSPs). Currently, D.C. approves ten PSPs for operation within the city. Many of these PSPs, however, are new companies that struggle to match the demand of their services with their available resources.

A PSP named Hitch, for example,  is notorious for late and inconsistent payments to cab drivers across the city. The credit card reader mandate has forced many cabbies to buy equipment from these PSPs, often with cash out of pocket. If a PSP goes bankrupt, cabbies must use their own money to replace all old equipment with new equipment from other PSPs.

A panel of District judges eliminated the possibility of one designated PSP in 2012, which could have eased many tensions. The District offered a $35 million deal to VeriFone, a company with a major stake in the New York City taxicab card reader market. The deal would have unified all of D.C.’s cab companies under one payment system, but judges struck it down due to “pervasive improprieties,” according to WAMU, leaving the market open to multiple PSPs.

Roy Spooner, Yellow Cab Company’s General Manager, has spoken in favor of multiple PSPs operating in the District. Spooner believes that only having VeriFone as the main PSP of the district would have reduced competition and efficiency and blames the current problems on the short time frame the companies were given.

“All PSPs in some form or fashion are experiencing some type of difficulty in trying to deploy their equipment, even the big ones like CMT and VeriFone,” Spooner said, according to WAMU. “They may not be as pronounced as others, but I think the complexity of the rollout in the time frame we had to work with may be a contributing issue.”

Photo: Victoria Pickering via Flickr

3 Comments on “D.C. taxi credit card implementation hits roadblock

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