‘CASH PREFERRED’: Card processing fees eating into taxi drivers' income
In the age of digital payments, taxi drivers face mounting costs associated with card transactions.
Drivers in some cases are being charged around 3.75% in fees for accepting card payments. While this may seem like a small amount per individual fare, it adds up significantly over the course of a year, with some cabbies paying over £2,000 in processing fees annually.
The main issue for cabbies lies in the fact that if a fare were paid in cash, the taxi driver would retain a larger portion of the total amount. This enables them to invest more quickly in new vehicles and allows the trade to attract more drivers to an industry that offers better pay. As a result for passengers, paying in cash could mean less waiting time, better vehicles and increased availability of taxis.
Furthermore, cash payments provide drivers with immediate access to funds, which can serve as a vital lifeline for covering bills and managing high living expenses. In contrast, card payments often take longer to clear, causing additional financial strain on drivers who are already facing tight budgets during the cost of living crisis.
However, it's important to consider the downsides of relying solely on cash
payments too. Carrying significant amounts of cash puts drivers at risk of being targeted by criminals. Additionally, depositing cash into bank accounts requires drivers to take time away from their work, leading to lost earnings.
These reasons explain why more taxi drivers are opting for "cash preferred" signs on the partition screens. It serves as a reminder that cash payments help bolster their income and maintain the efficiency of their operations.
Ultimately it’s the customers choice on their preferred method of payment. The ease of contactless payment makes it undeniably attractive and there’s no tangible financial benefit for the passenger regarding their choice. However, more passengers are steadily starting to question where their money goes for the service they pay for.
