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June 23, 2017

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Taxicab Authority OKs credit transactions for companies

The Nevada Taxicab Authority has authorized the city's two largest groups of taxi companies to accept credit and debit card transactions for a $3 fee, but the issue is far from over.

The five-member board voted 4-1 in a special meeting today to allow The Frias Group, which operates Ace Cab, Union Cab, A NLV Cab, Vegas-Western Cab and Virgin Valley Cab companies and the YCS group, operators of Yellow Cab, Checker Cab and Star Cab companies to accept credit and debit transactions.

But board members also agreed that the issue of credit and debit transactions would be revisited in future months because there are unanswered questions about the regulation of transaction fees.

At the heart of the issue is that some cab companies were allowed to offer credit and debit transactions as early as 2004, but the board never authorized it.

Seven other Clark County-based cab companies offer credit and debit transactions and have agreements with TaxiPass, a third-party vendor that has installed hardware and software in cabs to process transactions. With those companies, TaxiPass collects $3 per transaction and the computerized unit includes a global-position satellite system to monitor cab fleet movements as well as a video screen that can display advertisements, a new revenue stream for the cab companies.

TaxiPass was given permission to contract with cab companies without board approval by former Taxicab Authority Administrator Yvette Moore, who viewed it as an administrative decision. Current Administrator Gordon Walker feels such contracts need the board's approval and put a request from Frias on the agenda as well as consideration for setting a maximum allowable transaction charge.

At today's hearing, Frias representatives asked for permission to allow credit and debit transactions for a $3 fee. The company hasn't determined whether it would set up the transactions in-house or hire TaxiPass to do it.

Most of Frias' competitors recommended allowing the company to offer the transactions, but representatives from Bell Transportation suggested that the Taxicab Authority undertake the regulation and rule-making process that would apply to all cab companies. A representative from the YCS companies then asked to become part of the Frias request.

Although board members indicated they were uneasy about giving Frias and YCS permission to take credit transactions, knowing that the rules could change within a few months, the majority sided with approving the plan with chairwoman Stacie Michaels in opposition.

Among the unanswered questions likely to be considered when the board drafts regulations and rules:

*Does the board have the authority to regulate third-party vendors like TaxiPass since they operate independently, but their charges could be viewed as part of cab fare? Board members were split on the issue.

*Is $3 the proper fee to be charged for the service? A staff report indicated that in some cities, there's no extra fee for a credit or debit transaction and it's considered a business expense to the cab company. Board members also heard testimony that TaxiPass actually charges $3 for each $50 in fare, which means the fee could be higher on long trips, such as the drive from Las Vegas to Pahrump. Michaels pointed out that with the average fare in Clark County being $13.75, a $3 fee would amount to a more than 20 percent markup on the fare.

*How should fees be reported to the Taxicab Authority? Cab companies must report monthly revenue to the office, but some companies said they felt transaction fee revenue could be detailed in an annual report. New regulations would outline the board's preference.

*How should the consumer be notified of the fee? Board members were told information about the fee is detailed on a computer screen in the cab before the ride starts and a customer would have to "opt in" to the extra fee before the cab departed on the ride. But some board members said they thought it would be appropriate to list the fee as a sign on the exterior of the cab, just as mileage rates and other fees are disclosed.

*Should cab drivers share in the revenue generated by fees? The Industrial Technical Professional Employees union, which represents cab drivers for some Las Vegas companies, made the case that because drivers work directly with customers that they should share in any revenue generated for the cab company. There was differing testimony on how transaction fees would affect the level of tips to drivers, with the union believing it would cut into tip income and others saying tip revenue would be higher because there would be a specific line item allowing customers to add a tip on their credit or debit bill.

Companies also had various opinions on how many fare transactions would be credit and debit compared with cash.

Frias officials said they anticipated that 25 percent of their roughly 600,000 monthly trips would be paid for by credit or debit card. But Whittlesea Cab, operated by Bell Transportation, said only 12 percent to 14 percent of its transactions are credit or debit.

A-Cab owner Jay Nady said credit and debit transactions vary based on weekend and weekday traffic, but generally about 20 percent use cards. Because Nady's company is restricted from picking up passengers at McCarran International Airport and on the Las Vegas Strip, he has determined that the number of local customers who use credit and debit cards is minimal - around 5 percent of the average 40,000 monthly rides.

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