County commissioners are scheduled to make significant changes this week, including upgrading taxis and the technology inside them. Unfortunately, sometimes the most well-intentioned legislation creates unintended consequences when involving new technologies.
The clear legislative intent underlying the all proposed credit card regulations and prohibitions on certain rates, charges or fees is to protect both drivers and passengers from arbitrary and capricious charges. This is honest and prudent legislation. Unfortunately, much of the proposed legislation does not contemplate emerging technologies.
Take e-hail: simply put, “e-hail” is real-time taxi hail initiated by a mobile phone application.
E-hail is also a fourth payment option for passengers: (1) cash, (2) installed in vehicle credit card devices, (3) PayPal and Square, (4) and now e-hail with a cloud-based credit card payment accomplished via the app.
How e-hail works: Drivers have no risk. There are no hardware costs, financing, subscriptions or monthly fees. There is no fare split. Drivers simply download a driver version of the app and wait to get e-hailed. The relationship does not to replace owner fleets, radio dispatch or other traditional methods of obtaining fares. E-hail simply serves as a potential for extra income for drivers during idle times or return trips.
Passengers pay for the hail when they successfully e-hail a cab. The passenger is aware of the charge for the e-hail because they download the app, agree to terms and conditions, and save their credit card info in the app.
The ride fare is determined by the governmentally regulated metered rate. The passenger can pay by either: (1) by credit card via the app, or (2) cash — if mandated by the local government. At the end of the ride, the driver inputs the metered rate in his app on his phone, the passenger accepts and adds the tip on their phone. There is no handing over of the phone or credit card to the driver. The transaction is sterile and occurs securely in the cloud. Thereafter, a receipt detailing all tips, fares, tolls and governmentally approved fees is emailed to the user. Finally, if a credit card is used, the tips and fares are transferred daily to driver’s accounts or debit cards.
Concerns with the proposed regs:
1) Many of the proposals make it unlawful for any added “fees” to be “related to” transportation services as provided for a taxi. This section intended to avoid the arbitrary fees charged by some bad apples. Unfortunately, this overbroad section presents significant challenges for emerging technology services like e-hail because amending the code — particularly when it comes to for-hire vehicles — can be a cumbersome and stressful process. Moreover, if passed, this section may force existing providers of e-hail in Miami-Dade to stop offering their services.
A suggested solution would be for the proposals to permit the e-hail charge as an approved part of the “fare structure” as referenced in the proposed ordinance.
2) Next, the Credit Card Processing systems proposals set forth a regulatory regime which limits acceptable methods for accepting credit card payments to in-vehicle hardware connected to the taximeter.
The various versions mandate that taxicabs shall be equipped with a taximeter meeting the requirements described in this article and that any credit card processing system shall contain the fare charged, the name and telephone number of the passenger service company, the operating permit number and the telephone number for filing complaints with the Consumer Services. That makes total sense. Unfortunately, the proposals thereafter mandate that that the credit card processing system be affixed thereto a current valid taximeter and credit card processing system certification label, sticker or decal. This is cumbersome and hinders new cloud based technologies.
E-hail incorporates digital credit card processing technology, which is independent of credit card processing systems that will be operating within and affixed to a taxi and meter. It is a new payment option, which will be closed out by these new regulations as written.
The legislation should contemplate a provision for e-hail credit card processing services and passenger fees that are approved by Consumer Services based on emerging cloud-based industry standards. Like the traditional methods the legislation must also require the apps to list the fare charged, the name and telephone number of the passenger service company, the operating permit number and the telephone number for filing complaints with the County.
Luis is a government affairs lawyer and Miami Lobbyist serving elected officials, businesses, international clients and trade associations.