Because I got my start as a transportation policy junkie while analyzing the hybridization of New York’s taxi fleet back in college, I have a soft spot for news about the taxi industry. Earlier this week, The Times reported on cabbies’ views on credit cards two years after the city began requiring yellow cabs to accept plastic. Although the drivers at first complained about taking them, they are now unsurprisingly awfully accepting of the cards. Why? Because income is up. Since the automated payment system offers up more generous tips than most people give when paying by cash and because it’s now easier to hop into a cab when someone is cashless, drivers are reaping more money due to the advent of cabs that take credit cards. And to think, all of that complaining two years ago and dire warnings over less revenue was for naught.
previous post
3 comments
Funny how instead of the sky falling, it’s actually rising (or whatever the inverse of that ridiculous saying would be).
Personally I’m not surprised by this. I think the same holds true in a restaurant. With a credit card, you’re more likely to give the “right” tip, but with cash you might just go to the nearest big dollar amount. For example, if your cab fare was like $19, with cash you might just give them a $20 (I’m not encouraging this, but it happens). With a card, you’d be more likely to punch in $22 or $23 or something a little more appropriate, instead of maybe giving them $30 and asking for some change, etc. Plus the suggested default tips play a role too, as the article says.
Funny how some of them still complain about how they lose out on 5% of the fare or some nonsense that I don’t ever pay attention to.
This works with any type of spending, which is why credit cards are as popular as they are. In my cafeteria at work they converted to high-speed credit card readers last year. And signatures are no longer required for purchases under $25. As one cashier explained it to me, they did this because they were told “studies show” people start spending more money when they can pay with a card.