Have your say on proposals for paying by credit/debit card in taxis

Closed 24 Jul 2015

Opened 15 Jun 2015

Results Updated 6 Apr 2016

We recently consulted on proposals for passengers to pay by credit or debit cards for their journeys in taxi, thank you to those who took part.

1,097 respondents responded to the survey. 49% of respondents (538) identified themselves as taxi drivers – 45% of all respondents were All London drivers (497), 4% were Suburban drivers (41). 27% of respondents (300) were taxi users.

86% of respondents (939) supported the introduction of card payments in all taxis in London, with 68% of respondents (743) supporting contactless payments.

We are now reviewing the consultation responses and hope to announce a decision on any changes in early 2016. We will contact you again once a decision has been made.

You can read the full report and responses to issues raised here.

Overview

Update - 27 October 2015

We recently consulted on proposals for passengers to pay by credit or debit cards for their journeys in taxi, thank you to those who took part.

1,097 respondents responded to the survey. 49% of respondents (538) identified themselves as taxi drivers – 45% of all respondents were All London drivers (497), 4% were Suburban drivers (41). 27% of respondents (300) were taxi users.

86% of respondents (939) supported the introduction of card payments in all taxis in London, with 68% of respondents (743) supporting contactless payments.

We are now reviewing the consultation responses and hope to announce a decision on any changes in early 2016. We will contact you again once a decision has been made.

You can read the full report and responses to issues raised here.

Details of the original consultation can be found below.

Update Ends.

Why we consulted

We asked for your views on whether passengers should be able to pay by debit or credit card in all licensed taxis (black cabs) in London.

Since 2014 passengers have been able to pay by card across the bus and Tube networks and an increasing number of people are paying for other goods and services by card. At present there is no obligation on taxi drivers to accept card payments and only around half of taxi drivers in London do so. However, research has shown that the majority of taxi passengers (83%)[1] would like to be able to pay by card in all licensed taxis and in light of this we are reviewing credit and debit card payments in taxis.  

Why are we proposing this?

In the 2014 Taxi and Minicab Customer Satisfaction Survey, we asked taxi passengers if they felt that they should be able to pay by debit or credit card for all taxi journeys and the overwhelming majority (83%) felt that they should. Reasons given by passengers for why they feel they should be able to pay for taxi journeys by card included:

  • It’s an easier way to pay (29%)
  • Convenience (18%)
  • They don’t always have enough cash on them (17%)
  • Saves having to carry cash (14%)
  • There is no need to find a cash machine (8%)
  • Safety (7%)

From the same survey, 85% of passengers said that they would be likely to pay for taxi journeys by credit or debit card.

The current situation

The development of smartphone apps that allow passengers to book a taxi has made it easier for them to pay by card. However, not all taxi passengers have a smartphone and some still experience difficulties when they hail a taxi on the street or at a taxi rank and want to pay by card, as they cannot be certain that the driver will accept card payments.

A 2014 survey amongst taxi drivers showed that 42% did not accept card payments, although 48% of these drivers still felt that passengers should be able to pay by card[2]. Reasons given by drivers who did not think that passengers should be able to pay by card in all licensed taxis included:

  • It should be up to the driver if they accept card payments (19%)
  • Fee for processing credit/debit cards is too high (16%)
  • Safety/security concerns (13%)
  • Passengers are happy to pay cash (9%)
  • It is difficult or costly to install card payment equipment (3%)

 

What we are not proposing or consulting on

It is important to note that we are not proposing that taxis stop accepting cash payments or become ‘cashless’. If it was decided that passengers should be able to pay by card in all licensed taxis then this would be in addition to being able to pay by cash and not a replacement for cash payments.

This consultation is about credit and debit card payments in taxis (black cabs) only and no changes to payments for minicabs or other private hire services are being proposed or considered as part of this consultation.

This consultation is only about being able to use a credit or debit card in a taxi and does not include being able to use an Oyster card.

Additional points to consider

Timescales

If we were to require all taxis to accept credit and debit card payments so that passengers could pay by card when they wished to do so we would try and introduce this new requirement at the earliest opportunity.

One option would be for:

  • Passengers to be able to pay by card in all newly licensed taxis from October 2015
  • Passengers to be able to pay by card in all licensed taxis from April 2016

 

Alternative options would be for all taxis to accept card payments from April 2016 with no earlier requirement, or for a phased introduction of requirements which could potentially benefit drivers who have devices that do not accept contactless payments.

Contactless payments

The number of contactless card payments in London has grown significantly over the past couple of years. Passengers can now use their contactless card to pay for bus and Tube journeys and in February 2014 it was reported that one in five Londoners paid for their coffee and sandwiches with contactless cards and that one in three of the UK’s contactless transactions took place in the capital[3].

The current contactless card payment limit in the UK is £20.00 but from September 2015 the limit will increase to £30.00. Although the average taxi fare in London is below £30.00 some fares will usually be above this (e.g. for journeys from Heathrow Airport to central London) and so it is not felt appropriate that only contactless payments should be accepted in taxis and passengers should still have the option to pay using Chip and PIN.

Paying by contactless card may often be quicker for the driver and passenger than when the passenger has to enter their PIN. However, some drivers who already accept card payments may have devices that do not accept contactless card payments. Although all card payment devices will eventually accept contactless payments this could be after we introduce any potential requirement that passengers can pay by card in all licensed taxis.

Other payment services

In addition to Chip and PIN and contactless devices, there are a number of alternative ways that card payments can be made and accepted (e.g. by mobile phone, text message, Pay Pal, etc.), with new methods being developed and launched. Some new and future methods of making and accepting card payments may have a number of benefits for passengers and drivers including being cheaper, quicker or more convenient. 

We’re keen to know of any other card payment services, in addition to Chip and PIN and contactless, that could potentially be made available to taxi passengers. New services would need to be safe and secure to use for both passengers and drivers.

Surcharges

At present there is a surcharge set by us of £1.00 or 10% of the metered fare, whichever is greater, when a passenger pays for a taxi journey by credit or debit card. Drivers must also not charge passengers more than it costs them to accept card payments. This is a requirement in the Consumer Rights (Payment Surcharges) Regulations 2012.

If the surcharge set by us was removed then some of the costs drivers incur when accepting card payments could potentially be taken into consideration when we review taxi fares. This would be consistent with the approach to other items that all taxi drivers must have (e.g. taximeter) or the costs that all drivers face (e.g. fuel, insurance, parts, etc).

However, removing the surcharge and including certain costs in the taxi fares review may disadvantage some companies who expect to be able to recover the costs of investing in card payment equipment from the surcharge.  

It is possible that future legislation would remove most card payment surcharges and if this was the case then it is anticipated that all taxi drivers and taxi companies would have to comply with this.

Position of card payment equipment

At present the fitting of card payment devices in taxis varies, with some devices fixed in the passenger compartment, some in the driver compartment and others not fixed at all.

There are advantages and disadvantages to all of the different arrangements although the greatest benefit for passengers may be from all card payment devices being fixed in one position in the passenger compartment. However, this would disadvantage taxi drivers and companies who already have card payment equipment fitted in the driver compartment.

Taximeters

Some card payment devices currently in use are linked to the taximeter and at the end of the journey the card payment device will automatically show the amount payable and this will not need to be entered by the driver.

However, there is currently no requirement for card payment devices to be linked to the taximeter and others devices work by the driver entering the amount payable.

Signage

Our advertising guidelines for London taxis state that any signage displaying card payment information must be a minimum 17pt (Arial font) in contrasting colour to make it easily readable and that signage should be displayed in the following positions:

  • On the driver’s door, below the window line on the external door panel
  • On the partition screen behind the driver
  • On the front windscreen behind the driver’s rear view mirror

 

The signage normally shows which cards the driver accepts and this helps make it clear to passengers which cards they can use. If it was decided that passengers should be able to pay by credit or debit card in all taxis in London then having signage on all taxis would help make passengers aware that all taxis accepted card payments.

Cards accepted

At present we do not specify which cards approved card payment devices must accept. If we were to introduce a requirement to enable passengers to pay by card in all taxis then ideally all or at least the majority of cards would be accepted to ensure that all passengers could benefit from this service.

Therefore, in addition to MasterCard and Visa, we’re keen to know what other cards should potentially be accepted and whether these should include American Express, Discover Cards, JCB, or Union Pay.   

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[1] Taxi and Minicab Customer Satisfaction Survey, TNS, 2014/15

[2] Taxi and Private Hire Licensee Customer Satisfaction Survey, TNS, 2014/15


 

 

Areas

  • All Areas

Audiences

  • Public
  • Stakeholders
  • Local residents
  • Local businesses
  • Schools
  • London Boroughs
  • Coach Operators
  • Taxi trade
  • Transport for London
  • Taxi customers and other stakeholders

Interests

  • Taxis