Fare fight over credit cards?

In the war of cabbie versus customer, there is one issue that's guaranteed to raise blood pressures: credit cards.

If you've ever tried to pay a cab fare with a credit card, you may have heard one of the following responses from a cabbie: "The machine is broken," "Don't you have any cash?" "Can I drive you to an ATM?"

Legitimate excuses? Depends who you ask.

In addition to venting frustrations on Web sites like Yelp.com, customers are also filing complaints with the Department of Consumer Services. In 2007, all complaints against taxicab drivers -- not just those about cabbies refusing to accept credit cards -- totaled 10,000, up 42 percent from 2006.

Meanwhile, cab drivers and cab companies complain they pay too dearly for offering the convenience of credit cards to customers.

Steve Wiedersberg, president and founder of the Chicago Professional Taxi Cab Drivers Association, said he knows why many cab drivers scoff at credit cards.

"Credit cards are the most horrible thing on earth," he said, likening them to getting three root canals in one day.

Wiedersberg said cabbies generally must wait a week to get paid for credit card transactions, making it difficult for them to pay for the rising cost of filling up their gas tanks in the meantime.

In addition, companies charge drivers a flat fee of 5 percent to 15 percent to accept cards. Since 2004, the city has required all non-owner operated cab companies to accept credit cards, so cabbies must either comply or deal with the consequences of non-compliance.

"You're damned if you do or damned if you don't," he said.

At Koam Taxi Association, all cabs are equipped with credit card machines and drivers are instructed to accept credit cards. But because each cab driver is an independent contractor, sometimes they take matters into their own hands, according to manager Kang Wie.

"I tell them to chalk it up to be a business expense," she said.

As for the excuses that customers complain about, Wie said cab drivers have other options, even if the machine is not operating properly. If all else fails, she said, many drivers carry carbon copy sheets to record credit card information or can manually write down the information, though she said she discourages drivers from writing down the information to avoid errors.

While the situation can be frustrating to drivers, she said a driver asking for a larger tip to accept a credit card or refusing a fare altogether is "just plain bad manners."

After years of frustrating credit card transactions, Mark Scozzafave has reverted back to cash. The Printer's Row resident frequently takes cabs to and from the airport for business trips. He used credit cards because of the convenience, but now makes a special effort to hit the ATM before leaving town.

"For the most part I've given up on trying," he said. "But sometimes it's still necessary."

To compromise with the cabbies, Scozzafave tells the driver upfront that he will be paying with a credit card and has even offered to tip cabbies more for the ride if they will accept credit cards, but he said he still faces resistance.

Tipping is not the primary concern for cabbies, according to Gold Coast Taxi Association manager John Assabill. Credit card or cash, cabbies are concerned about getting paid, he said, but regardless of the method, he encourages cooperation between customers and cabbies.

"Taking the credit card is not the problem," he said.

Instead, Assabill said credit cards create additional paperwork for the cab companies and can be a financial burden for both cabbies and the cab association. Assabill estimated that credit card transactions account for up to 75 percent of Gold Coast's income.

Similar to Koam, Gold Coast Taxi drivers are charged a flat rate of 5 percent per credit card transaction and drivers must come into the office to collect their credit card payments twice a month.

But the costs continue even after the card is swiped. Assabill said a customer recently disputed a charge for a fare under $5 and in turn, American Express charged the cab company a $25 fine. Even if the fare had been $100, Assabill said, the charge imposed by the credit card company far exceeds the transaction fee paid by the cab company.

Assabill also takes issue with American Express because the credit card company charges a higher transaction fee of 3.5 percent, versus 3.0 percent for VISA and MasterCard. In addition, he said Amex takes longer to process payments - two weeks to three weeks, on average -- compared with two days to three days for the other credit card companies.

When all of these factors add up, Assabill said accepting credit cards is not worthwhile from a business standpoint, but he said he has no choice.

"We cannot refuse anything, we have to accept everything," he said.

Assabill and Wiedersberg have aired their frustrations with the Department of Consumer Services, but to little avail. Both question why the city is able to force cabbies to accept credit cards when other privately held companies do not face the same obligation. And now that the rule is in place, they said it will be difficult to change.

Scozzafave also thinks there is a better solution. The market is ripe for the right technology, he said, and a cab company that is more adept at accepting credit cards will make a huge difference to Chicago cab customers.

"It seems like a very archaic process," he said.

Wiedersberg disagrees: "Credit cards may be the wave of the future, but they're not the wave of the future for cab companies."

Until a new solution is reached, in the war over credit cards, Scozzafave will bargain when he is forced to use what he calls "a valid form of payment," while drivers like Wiedersberg will denounce the so-called "cashless system."

And Wiedersberg had one parting shot for customers: "If you don't have cash, don't get in the cab."