Singer antoniosol has a lot to do in LA, and he uses cabs. But he also wishes he could use his credit card:

It took me forever to find a taxi that accepts credit cards as payment. Sometimes I wish I had my car out here.http://yfrog.com/5syoej

Why do some taxicabs accept credit cards, but others don’t? And are taxis that take plastic a trend, or a pipe dream?

Usually, major decisions involving taxicabs are made by regulatory boards instead of by taxicab companies. These boards typically determine basic rules for cabs, like rates and riders’ rights, and that includes whether riders may use a credit card or not. So, if you can use a credit card in a taxicab, odds are that you’re able to do so because of the actions of these regulatory boards. Charges are usually made through individual credit card readers or third party programs like TaxiPass.

However, taxicab credit card use lags, both in non-mandated and mandated cities. Some taxicab associations, like those in Las Vegas, have yet to force their drivers to take credit cards. Since taxicab drivers strongly dislike credit card payments, they are highly resistent to letting the rules change. Even in cities that mandate credit card acceptance, credit card payment is by no means universal. There are reports in Chicago and New York- two supposedly credit card friendly cities- that drivers frequently balk at accepting credit cards, or claim that their credit card readers are “broken.” In LA, where antoniosol lives, taxicab drivers are technically required to use credit card readers- but that doesn’t mean it happens.

Taxicab drivers dislike credit card payments because of high fees that can sometimes reach as much as 5%. That makes it difficult for associations of taxicab drivers to pass rules requiring credit card acceptance. In addition, credit card systems occasionally falter due to poor connections. However, the most significant reason for credit card refusal remains the fees that cab companies and drivers pay to accept credit payments.

That said, there are some benefits for cabbies when they accept credit cards (though it’s tough to know if they outweigh the negatives). Visa reports that cabbies are likely to be tipped more when credit cards are used- usually around 22% instead of the normal 15%. More importantly, there’s some evidence that credit card readers increase business. Credit cards make it easier for business travelers to use cabs, and people appreciate the ease of use. The New York Taxi Commission believes that credit cards may have even helped New York cabbies get through the recession.

It may remain difficult to use your credit card in a taxicab due to high rates and costs. However, there is a movement to get cabbies to take credit. If you think you can use credit, a little persistence with your driver might go a long way in getting him to fix a “broken” machine. Even if drivers don’t want to take credit, they still care about getting paid. Since you’re the one doing it, you can express your right to choose how.

Tags: accepting credit cards, credit card acceptance, credit card payment, credit card payments, credit card readers, las vegas, mandate, regulatory boards, taxicab companies, taxicab drivers, taxicabs, taxipass, third party