An impending surcharge on credit card payments received by taxicabs has drivers fuming.
“It’s a wage cut for drivers, and a boon for wealthy fleets who basically get a lease increase without a fare raise,” said Bhairavi Desai, Executive Director of New York Taxi Workers Alliance. “The fleets claimed their costs went up, even though drivers pay them a rate of 5% per transaction, while the fleets are charged 3% or less.”
Effective June 22, 2014, the credit card surcharge will increase for all taxicab leases. The increases will be $11 per shift for daily leases (up from $10 per shift), $66 per week for weekly leases (up from $60 per week), and $132 per week for weekly Driver-Owned Vehicle (DOV) leases (up from $120 per week).
In the past, drivers have paid a flat credit card surcharge per shift or per week instead of a 5-percent fee based off of credit card transactions. The Taxi & Limosine Commission, which has the right to review these charges and determine if the credit card processing surcharge covers five percent of the average total credit card fares collected within a shift, did so in December 2013. The TLC’s review of taxi trip data revealed that average credit card fares totaled $212.68 per shift, yielding a calculated surcharge of $11 per shift, not the $10 currently charged.
But drivers see a boondoggle to fleet owners, at their expense.
“After looking over the data, the owners think they’re entitled to another buck,” said Robert Greenberg, a cab driver pulled over in Williamsburg while on his shift. “But no one questions whether these rates work out to our benefit.”
Ms. Desai agrees. “Even though credit cards could have meant better income for drivers, with the 5% and added costs for reimbursements, they’ve actually lead to wage cuts,” she said.
Both Desai and Greenberg also pointed out additional costs borne by drivers that are conveniently ignored.
“We’re charged an MTA tax,” Greenberg said. “We’re not affiliated with the MTA, and none of that tax revenue inures to our benefit.”
“When gasoline goes up for drivers, we have no similar mechanism to protect incomes from dropping,” Desai added. “The fleets, though, get protection for their profit margins. It’s simply wrong.”
The Taxi & Limousine Commission disagreed.
“This is merely an implementation of a rule that we passed over two years ago,” said Conan Freud, the TLC’s Chief Operating Officer.