San Francisco council’s vote raises questions about cab credit card fees

Credit card fees for taxi drivers, an issue that has led to protests and threats of strikes, might be lessened or eliminated.

On Monday, the Taxi Advisory Council recommended ending a pilot program allowing cab companies to charge drivers a 5 percent credit card transaction fee. In place since October, the program grants companies a waiver from San Francisco’s transportation code protecting drivers from such fees.

Even though the council is an advisory body, and policymaking for cabs lies with the San Francisco Municipal Transportation Agency, some drivers argue Monday’s vote should end the credit card fee program. Under a memo issued in October by the SFMTA, Christiane Hayashi, the agency’s taxi director, said the pilot program would be in place until reviewed by the council.

“This pilot program was supposed to be in place until we reviewed it,” said John Han, a member of the 15-person body. “On Monday, we reviewed it and we recommended that the program should end.”

Mark Gruberg, spokesman for the United Taxicab Workers, agreed with Han’s assessment of the ruling, although he said companies are unlikely to cease the current practice for quite some time.

John Lazar, president of Luxor Cab, said the advisory council’s ruling had no authority. He said he’s invested thousands of dollars installing credit card equipment in his cabs and has no plans to stop charging his drivers fees. He said SFMTA’s board of directors is the only body that can change the policy.

Kristen Holland, spokeswoman for SFMTA, sided with Lazar, and said the council is only an advisory body without control to end the program. SFMTA could review the issue at its Aug. 2 meeting.

Gruberg said drivers would press the SFMTA to follow the guidelines set out by Hayashi’s memo.

Cab drivers have stormed SFMTA board meetings and held three protests to demonstrate against the 5 percent credit card fees. Drivers have said the fees are exorbitant, pointing out that credit card companies typically only charge merchants 2 to 3 percent.

There has been talk of lowering the fees to something less than 5 percent, but the Taxi Advisory Council voted Monday to stop the program altogether, meaning if its recommendation is adopted, drivers would pay no transaction fee.

SFMTA’s board of directors is keenly aware of the drivers concerns, and is interested in bringing down the fees, said member Malcolm Heinicke. He said there is support among the board to lower the credit card fees, provided that companies do not absorb an unfair amount of the costs.

In black and white

Transportation code section that prohibits passing off credit card fees to drivers: “A Color Scheme shall provide cashiering services to any Driver for credit and debit card transactions collected by that Driver as payment of taxi fare while that Driver was driving a vehicle affiliated with that Color Scheme, and shall not charge a Driver for any merchant account processing fees for fares paid by credit or debit card.”

SFMTA taxi director Christiane Hayashi’s memo outlining the waiver from the program: “Such a waiver is granted as a limited pilot program until such time as it can be reviewed by the Taxi Advisory Council.”

Sources: SFMTA, Taxi Town SF

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