Comments on: The Effect of Card Acceptance on Sales: The Case of Taxicabs in New York http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/ The Catalyst Code Thu, 09 Sep 2010 08:25:45 +0000 http://wordpress.org/?v=2.0.11 by: Alex Parkhomenko http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-23593 Wed, 28 Jul 2010 11:39:39 +0000 http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-23593 Great article but you didn't count the main reason for me: cash is visually countable and plastic balance is not — I spend much more blindly when I can't feel every banknote I give away. Great article but you didn’t count the main reason for me: cash is visually countable and plastic balance is not — I spend much more blindly when I can’t feel every banknote I give away.

]]> by: David Evans http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-18923 Sat, 28 Nov 2009 19:17:07 +0000 http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-18923 That's interesting Tom. The "It's broken" used to be the experience many of us had in New York but at least in recent months I haven't been declined once in Manhattan. Exactly that did happen on a trip from LaGuardia outside of the city. You are right about the problems. The drivers don't like either the haircut or even worse waiting to get their money. The TaxiPass solution I mentioned gets around this problem by having having the passenger pay TaxiPass and then distributing the money right away to the driver. That’s interesting Tom. The “It’s broken” used to be the experience many of us had in New York but at least in recent months I haven’t been declined once in Manhattan. Exactly that did happen on a trip from LaGuardia outside of the city. You are right about the problems. The drivers don’t like either the haircut or even worse waiting to get their money. The TaxiPass solution I mentioned gets around this problem by having having the passenger pay TaxiPass and then distributing the money right away to the driver.

]]> by: Tom Layman http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-18656 Fri, 20 Nov 2009 00:11:26 +0000 http://www.thecatalystcode.com/theconversation/blog/2009/11/09/the-effect-of-card-acceptance-on-sales-the-case-of-taxicabs-in-new-york/#comment-18656 David-- A great analysis of the cards and taxi cab usage. There are still however a few grains of sand in the transaction flow that do result in some declines by taxi drivers in NY to accept cards. On a recent trip there, roughly 5 of the 10 cab drivers that I took said their "terminals did not work". Being curious and know some of the comments you made I follow up the comment with questions to better understand why they did not "get them fixed". It turns out that the sand results from the way in which the drivers, most of whom of course are only "renting" the car and medallion from a larger company, finally get paid for the credit or debit card transactions. In each discussion, it was claimed that the driver had to turn in all of the receipts at the end of the week, on a specific day during specific times. Then the company managing the cabs, think the TV serial "TAXI" and Danny DeVito sitting behind a glass booth and handing over cash, at the "appropriate" discout to the individual drivers. The discount as you would expect included the full fare and the "higher tip". Of course the drivers have no clue as to what the Merchant Discoun Fees might be or how much they vary. Indeed if they did they would likely only accept PIN debit! Night shift drivers seemed to be the most concerned as they had to "wake up" at odd hours to get the receipts turned in. One driver indicated that his company did not pay him for up to a week after he had turned in receipts. Ah, time is money!! In defense of the cab companies see card acceptance as a win/win situation too, as it effectively eliminates shortages and "pilferage" by drivers. Ah, but there is a solution to these inefficiencies. A cludge for sure but it seems to work. Here in San Franciso, Luxor cabs has entered into a pilot with U.S. Bank, whose Elavon subsidiary is the acquirer for the card transactions. U.S. Bank issues general purpose prepaid debit cards to the cab company employees. So rather than having to take the receipts, the driver receives an instant credit electronically to the card each night for the receipts his cab logs. Drivers get access immediately, the company gets more revenue from less pilferage, Visa and U.S. bank both make more money from more transactions both from the cabs and from the spend on the driver's cards as they use them--where ever they want to be! Thanks, Tom David–
A great analysis of the cards and taxi cab usage. There are still however a few grains of sand in the transaction flow that do result in some declines by taxi drivers in NY to accept cards. On a recent trip there, roughly 5 of the 10 cab drivers that I took said their “terminals did not work”. Being curious and know some of the comments you made I follow up the comment with questions to better understand why they did not “get them fixed”.

It turns out that the sand results from the way in which the drivers, most of whom of course are only “renting” the car and medallion from a larger company, finally get paid for the credit or debit card transactions. In each discussion, it was claimed that the driver had to turn in all of the receipts at the end of the week, on a specific day during specific times. Then the company managing the cabs, think the TV serial “TAXI” and Danny DeVito sitting behind a glass booth and handing over cash, at the “appropriate” discout to the individual drivers. The discount as you would expect included the full fare and the “higher tip”. Of course the drivers have no clue as to what the Merchant Discoun Fees might be or how much they vary. Indeed if they did they would likely only accept PIN debit! Night shift drivers seemed to be the most concerned as they had to “wake up” at odd hours to get the receipts turned in. One driver indicated that his company did not pay him for up to a week after he had turned in receipts. Ah, time is money!! In defense of the cab companies see card acceptance as a win/win situation too, as it effectively eliminates shortages and “pilferage” by drivers.

Ah, but there is a solution to these inefficiencies. A cludge for sure but it seems to work. Here in San Franciso, Luxor cabs has entered into a pilot with U.S. Bank, whose Elavon subsidiary is the acquirer for the card transactions. U.S. Bank issues general purpose prepaid debit cards to the cab company employees. So rather than having to take the receipts, the driver receives an instant credit electronically to the card each night for the receipts his cab logs. Drivers get access immediately, the company gets more revenue from less pilferage, Visa and U.S. bank both make more money from more transactions both from the cabs and from the spend on the driver’s cards as they use them–where ever they want to be!
Thanks, Tom

]]>