DC DRIVERS UNITED FOR EQUAL RIGHTS. Credit Card Transition NOT Authorized Cabdrivers ready to modernize. Taxicab Commission not so much.

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1 DC DRIVERS UNITED FOR EQUAL RIGHTS Credit Card Transition NOT Authorized Cabdrivers ready to modernize. Taxicab Commission not so much. September, 2013

2 DC Drivers United for Equal Rights is a cabdriver formed and led organization focused on improving the working conditions of cabdrivers who entered the DC taxicab industry after We believe that if we improve the working conditions of this particular community of cabdrivers, we can improve the overall industry and preserve economic opportunity for all DC cabdrivers. The year 2006 marked the District of Columbia s transition to revised vehicle registration rules limiting registration of cars to District of Columbia residents. This switch however, failed to take into account that while most DC cabdrivers own the car they drive as a cab, many live and house their cab in neighboring jurisdictions. With several thousand cabdrivers expected to be pushed out of work as a result of the changes, DC-based cab companies began bridging cabdrivers ability to continue working by serving as co-owner and thereafter, co-registrant of the cabs owned by the impacted cabdrivers. This was/is possible because the Department of Motor Vehicles permits dual ownership and registration of cars so long as one party is a DC resident. Today the DC Taxicab Commission is interpreting the year 2006 changes to DMV law to prohibit dual titling and registration. This prohibition does not apply to all cars however, only to cars that operate as taxicabs and among those only to cabs placed into service after In turn, this means cabdrivers who are not DC residents are slowly being forced to give up ownership of their cab; cabs they purchased with their own money and are solely responsible for on a day-to-day basis. DC Drivers United intends to work diligently and consistently to resolve this and other changes unfairly impacting cabdrivers who entered the industry after M. Aurora Vásquez is an attorney activist who partners with cabdrivers in the design and implementation of cabdriver-led grassroots campaigns to improve their working conditions. Aurora has partnered with cabbies in the pursuit of economic justice for more than a decade and can be reached at avasquez@excludedworkerproject.org or at

3 The members of DC Drivers United for Equal Rights and our cabdriver allies are ready to make the switch to credit cards. We recognize the utility of offering riders the opportunity to pay by credit card and support industry approaches that not only make it easier for riders and cabdrivers to conduct business but which will also facilitate the transition to a modernized taxicab industry. September 30 th, 2013 marks the deadline set by the District of Columbia Taxicab Commission for the installation of credit card processing devices in every DC taxicab. This date however, reflects an adjustment from the initial goal of securing installation in all cabs by the end of August, While the Taxicab Commission has, over the years, claimed not to know precisely how many taxicabs are actively providing service in DC they expect nearly 6,000 taxicabs will have credit card processing devices installed. 1 To this end, the DC Taxicab Commission approved eight Payment Service Providers (PSP) to meet the installation needs of every cabdriver. Those PSPs include: Creative Mobile Technologies Gleike Taxi Inc. Hitch Transco USA Motors United Ventures Consortium DC VIP; and Yellow Cab of DC As most DC taxicabs are owned by the person who operates it, the transition process requires individual cabdrivers to contract with a PSP then present their 1 PSP Installation Report for Week Ending September 13, 2013 (District of Columbia Taxicab Commission).

4 cabs to the provider for installation of the credit card machine. As part of this process the Taxicab Commission required every cabdriver to have a signed contract with a PSP by August 15 th or risk steep penalties for failing to comply. While the DC Taxicab Commission had a direct hand in identifying the pool of PSPs from which cabdrivers would be obligated to select, beyond that they have refused to deal with cabdrivers directly on this matter. Rather, the Taxicab Commission has intimated that cabdrivers questions or concerns related to PSPs are a private contract matter between the driver and the vendor. As a result not even when cabdrivers worry that the PSP will be unable to meet the installation deadline set by the Taxicab Commission or when the vendors are tacking on unexpected fees, DCTC will not act. Nor can DCTC respond as it does not have a formal process for accepting, evaluating, and acting on cabdrivers concerns. --Chairman Ron Linton, The TaxiLink (Aug. 2013) Instead, it appears the Taxicab Commission is bearing little responsibility for ensuring the industry s transition to credit cards runs smoothly and efficiently for the riders, cab companies, and cabdrivers who expect to use it. To this end in various media outlets Chairman Linton has already predicted there will be a number of cabdrivers as many as 2,000 who will not meet the September 30 th installation deadline. Yet with the deadline looming and the backlog plainly evident, the Chairman has not revealed a plan for ensuring riders for instance, have uniform credit card payment options. To the contrary, it appears the Chairman is prioritizing preperations to fine and otherwise penalize cabdrivers come October 1 st. A clear example of the extent to which the Taxicab Commission has shut cabdrivers out of the very process they assert cabdrivers are most responsible for, was evident in the process for seeking an installation extension. When the

5 installation deadline was extended from August to September, it was the PSP and not the cabdriver who had to submit the request to the Taxicab Commission. This required the PSP to submit a request on behalf of every cabdriver with which it had contracted but not yet installed the credit card processing device. Additionally, the regulations adopted by the Taxicab Commission limit the PSPs to one extension and are silent on what cabdrivers should do if the PSP drops the ball. This latter point however, is not solely a private contract matter as cabdrivers who do not have a properly working credit card device installed by the September 30 th deadline face DCTC devised penalties. Because the DC Taxicab Commission has a long history of hyper policing and aggressive enforcement against cabdrivers however, cabbies are rightly concerned that should PSPs be unable to meet the installation deadline they will be left holding the bag. With the September 30th deadline looming, the Taxicab Commission recently released a one page analysis examining the progress of installation as of September 13, While the brief analysis does not indicate how the Taxicab Commission obtained its data, the analysis projects 5,962 taxicabs will be fitted with credit card processing devices. Alarmingly however, with a mere two weeks remaining at the time the analysis was released, the findings also showed installation was at a mere 51 percent. In short, what the analysis revealed was that in order to meet the September 30 th deadline the eight PSPs would have to install credit card processing devices in more than 170 cabs a day, seven days a week.

6 Alarmed by the divide between cabdrivers readiness to transition to credit card payment capabilities and the lack of progress revealed in the Taxicab Commission s analysis, DC Drivers United worried matters were likely worse than the DCTC analysis suggested. Reflecting on what members and allied cabdrivers were saying about their experiences trying to get a credit card processing device installed in their cab it became clear many drivers were reporting similar experiences and concerns including: Showing up for their pre-assigned installation appointment only to be told to come back another day; Long delays sometimes days in calibrating the meter to sync properly with the credit card processing device; Installation processes and procedures requiring the driver to return to the installation site multiple times or wait long hours; Installed credit card devices that failed to work properly upon installation; Installed credit card devices that went down intermittently following an initially successful installation; and Payment Service Providers tacking on numerous fees above and beyond a monthly charge for service. Recognizing the September 30 th deadline is nearly upon us and the Taxicab Commission is holding fast to its position that it will not intervene in private contract matters DC Drivers United undertook a random survey of 179 cabdrivers. The hope was to collect information on their experiences in order to begin identifying immediate next steps capable of preserving fairness for cabdrivers while avoiding needless delay with this phase of the industry s push toward modernization.

7 Over a 48 hour period ending on Saturday, September 21 st DC Drivers United for Equal Rights surveyed 179 cabdrivers regarding their experiences either having or seeking to have, a credit card device installed in their cab. Of these surveys, only five failed to clearly indicate whether the driver had succeeded or pursued installation. The most alarming findings involve two of the three top PSPs -- Hitch and Gleike Taxi Inc. which along with USA Motors are predicted to install of the projected. In fact, Hitch alone is expected to install. As of the date of the Taxicab Commission s September 13 th analysis Hitch had only installed a reported 635 cabs. Stated differently, with a mere 17 days left ahead of the September 30 th deadline this PSP had installed credit card devices in 31% of the cabs it had contracted with. Making matters worse, according to information on the Taxicab Commission s website, Hitch was on the brink of suspension until September 20 th when it was granted Restricted Permission to proceed. It is not clear then, how and if Hitch will meet cabdrivers installation needs. Expected to install credit card processing devices in nearly 600 cabs, as of September 13 th Gleike had installed devices in 430. On Friday, September 20 th however it was revealed that Gleike was no longer working in partnership with Grand Cab Company, which had contracted with the PSP to provide installation services to its drivers as well as some independent cabbies. This development calls into question the fate of those cabdrivers who have had Gleike devices installed as well as those who were as of September 21 st waiting for Gleike service and, where money has been exchanged for services, whether cab companies and/or cabdrivers can afford to contract with a different vendor. Lastly, it also begs the question as to how many other cab companies this PSP contracted with and whether it continues providing service through/with them. The most obvious holder of this information ought to be the Taxicab Commission but for the fact that the office refuses to fully participate in the ongoing transition.

8 A full 102 of the drivers surveyed 57% -- did not yet have a credit card processing device installed as of September 21 st. Making matters worse, all indicators suggest that finalizing installation will not be easy as those who did have a device installed commonly reported having to wait anywhere from six to eight hours to complete the process. While most cabdrivers expected a monthly service and credit card processing fee, few anticipated the breadth of additional fees some PSPs are charging. Thus, with the field of approved PSPs shrinking, affordability is too. For instance, in addition to the aforementioned fees one vendor also charges cabdrivers a fee every time a credit card is swiped as well as a PSP fee for all trips and in some cases an app integration service fee. While the Taxicab Commission says it will not insert itself into contract matters between cabdrivers and PSPs, the Commission did go so far as to limit cabdrivers to contracting from among eight PSPs. Thus, with the limited pool of approved vendors shrinking so too is cabdrivers choice. Additionally while on its website the Taxicab Commission says cabdrivers will have a choice of contracting with any approved vendor, in practice this is not the case as some cab companies have entered into contracts with specific PSPs and are requiring their drivers to contract with that vendor (Grand and Gleike are one such arrangement). Cabdrivers in this situation however, cannot readily switch cab companies in order to preserve their ability to freely select their PSP due to the 2006 vehicle registration issue previously discussed (see page 1). In short, the Taxicab Commission is preventing cabdrivers who entered the taxicab industry after 2006 from appearing as co-owners and co-registrants of their own cabs even though they are the rightful owner of the car. In turn, this has forced cabdrivers out of business or in order to remain in business to sign over the title of their car to the company they work for, significantly hampering cabdrivers ability to readily transfer away from their company if they are unhappy with the selected PSP.

9 Time is of the essence as the September 30 th deadline is looming while installation of credit card devices continues to lag. To ensure a smooth and timely transition to credit card payment options, DCTC must be as prepared to facilitate the transition as are cabdrivers. The following immediate next steps will help align the District of Columbia s interest in modernizing the taxicab industry with cabdrivers readiness to provide credit card payment options:

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11 Every cabdriver who submitted a completed survey as of September 21 st had a signed contract with a PSP. This includes third party contracts where the cab company contracted with a PSP, requiring its drivers to use that vendor. 102 cabdrivers - 57% - did not yet have a credit card device installed in their cab but among the 72 who did, most drivers reported waiting either six or eight hours for the installation to be completed while others reported the process took several days. Two days was most common however, at least one reported it took eight days to complete. Among the 72 drivers who reported having a credit card device installed, 48 (nearly 67%) also reported the installation process required more than one visit. For instance, 18 drivers returned twice while another 19 returned three times. Only 40 of the 72 drivers who reported having a credit card device installed also said the system worked upon installation. Overall however, nearly 56% of the 72 drivers who reported having a credit card processing device installed, also reported the system stopped working at some point after installation. The numbers ranged widely from as little as one time to so many times the driver lost count. A malfunctioning credit card device is highly detrimental as the meter will not work if the credit card device is not functioning. In turn, if the meter does not function the cabdriver cannot work yet PSPs charge a monthly service fee. Related to concerns over malfunctioning equipment is the new dome light; if it stops working so does the meter.

12 For all cabbies (including those waiting for installation) they most commonly identified the following PSPs as their provider: Gleike Taxi Inc. Hitch USA Motors Yellow Cab of DC DC VIP Creative Mobile Technologies United Ventures Consortium. According to the Taxicab Commission s September 13 th analysis Hitch, USA Motors, and Gleike are expected to install 63% of the projected 5,962 credit card processing devices. Payment Service Provider Projected Installations Progress as of Sept. 13, 2013* *17 days left before September 30 th deadline Percent of projected installations Hitch %* USA Motors % Gleike Taxi Inc %** - Source: PSP Installation Report for Week Ending September 13, 2013 (DC Taxicab Commission) *Hitch has been issued a Notice of Intent to Suspend by the Taxicab Commission and as of September 20 th has Restricted Permission to operate. **Gleike contracted with Grand Cab Company to provide service to its drivers. However, on Friday September 20 th Grand drivers were informed the contract between Grand and Gleike is no longer in effect. Generally speaking, 16% of cabdrivers across multiple companies indicated the company not the driver selected the PSP.

13 DC Drivers United for Equal Rights supports the transition to credit cards. Cabdrivers however, should not be held responsible for the Taxicab Commission s poor planning and poor estimation of how long it would take to install properly functioning credit card devices in some 6,000 cabs. Nor should cabdrivers be held responsible for Payment Service Providers inability or unwillingness to meet their own installation projections. Not only has the credit card installation process and timing gone significantly astray, when installed some credit card devices do not work. Additionally, other devices have become inoperable following installation and some cabdrivers have been fitted with credit card processing devices installed by PSPs who are not providing the service contracted for. Thus, no action should be taken against cabdrivers who lack a credit card processing device functioning or otherwise until the installation backlog caused by the shortage of PSPs and/or by negotiations between the Taxicab Commission and the PSPs, is resolved. Additionally, where cabdrivers fail to comply with the installation requirements under the revised approach there should be graduated penalties before a cabdriver is taken off the road. The Taxicab Commission s insistence that interactions between Payment Service Providers and cabdrivers are private contract matters does not absolve the office of its responsibility for ensuring the PSPs it approved meet their obligations and promises to the District and the taxicab industry. An ombudsman or similar independent regulator should be identified to help cabdrivers resolve the

14 problems caused by the exceedingly flawed approach to the credit card transition process. Cabdrivers recognize the utility of offering riders credit card payment options. For this reason DC Drivers United for Equal Rights supports this transition. To the extent the transition is failing however, while it is not solely cabdrivers responsibility all indicators are the Taxicab Commission intends to place the blame squarely on them. Such an approach however, does little to facilitate the desired transition. Now is the time to carefully and transparently examine what has gone wrong in order to identify more reasonable and effective ways to proceed. The transition to credit card payment options has gone significantly astray. This is no small matter however as riders and cabdrivers alike are expecting a smooth and timely transition. The current approach however conceived has proven itself deeply flawed but cabdrivers will be the first to carry the burden of the defective approach. Thus, a work group should be established and tasked with the responsibility of identifying a new process for ensuring the transition to credit card payment options moves ahead. Cabdrivers however, offer a very unique lens and understanding of the process and should therefore have a seat at the table. If cabdrivers are still expected to contract with the shrinking list of pre-approved PSPs, immediate steps must be taken to ensure they can do so freely. This will require however that all parties involved in the process for registering a taxicab in DC

15 especially where the cabdriver is not a DC resident abandon the misguided practice of informing cabdrivers they cannot be co-owners or coregistrants of their own cab if they entered the industry after Because the laws governing the registration of cars in the District of Columbia permit co-ownership as long as one owner is a DC resident and do not exempt cars that operate as cabs from this opportunity, the DC Council and the Department of Motor Vehicles should take immediate steps to ensure the Taxicab Commission stops interfering with cabdrivers right to maintain ownership of their cabs as ownership of the cab is central to the drivers ability to freely select a PSP of her/his choosing. Cabdrivers expect to pay certain fees in order to secure reliable credit card processing capabilities and while cabdrivers are open to the idea that not all charges can be capped, it is important to identify which can. For instance, the credit card processing fee may be one such charge; this fee already varies by vendor. Moreover, there should be careful examination as to the permissibility of other fees such as the credit card swipe fee and other per-transaction fees.