The next time you ride in a taxi in the nation’s capital, you’ll see something different: A Square credit card reader. By the end of August 2017, Washington’s thousands of cabs will take out their traditional meters and replace them with digital meters and a Square credit card reader.
According to Bloomberg’s Joshua Brustein, Square will handle payment processing for Washington, DC’s taxi fleet–which will make it much easier for the city’s taxi drivers, who are primarily independent contractors, to process credit card fares and compete with Uber and Lyft.
Square’s Replacing Meters In Washington DC Taxis: How It Works
In order to make the deal happen across thousands of taxicabs and make awkward expense vouchers and complicated handswipes of credit cards a thing of the past, Square and Washington’s Department of For-Hire Vehicles had to make a special agreement.
Square will offer a special 2.65 percent commission of their fares in transaction fees, which is lower than Square’s standard 2.75 percent rate and far less than the 3.5 percent to 5 percent commission that Washington DC’s independent contractor taxi drivers currently pay for use of mechanical meters.
This switchover to Square credit card processing benefits both Washington, DC taxi drivers and passengers.
As a passenger, you’ll insert your card into a Square credit card reader located on the back of the driver seat. This credit card reader connects to a new meter on the driver’s dashboard and offers seamless credit card payments and receipts–cash payments will work the same as they did before.
For drivers, the new Square meters mean they’ll take more money home–Square’s 2.65 percent commission on credit card transactions is cheaper than what they pay right now. It also means they can offer more competition for ridesharing services like Uber, which have a very strong presence in Washington.
Square’s Replacing Meters In Washington DC Taxis: Why It Matters
Most of Washington, DC’s cabbies–and most taxi drivers in big cities in the United States–are independent contractors who lease or own their cabs. This means that, although they belong to cab companies which help dispatch rides, they don’t have taxes taken out of their paycheck, have to pay work expenses out of pocket, and don’t get benefits many Americans take for granted like health insurance or vacation time.
According to DFHV director Ernest Chrappah, “With the move to an all-digital platform from the legacy taximeter and Square’s payment technology, we’ll be able to provide better service for both our customers and drivers who deserve fair rates and the advanced features they have come to expect in our new digital environment.”
DC taxi drivers have their own app as well.