Within the last month or so, the city of San Francisco has imposed a 5% credit card processing fee on all taxi cab transactions. The main issue seems to be that taxicab companies want to hire cab drivers as independent contractors so they don't have to pay them benefits. However, they are now trying to install machines in the cabs to record every transaction made, most likely to reduce the risk of drivers stealing money / not recording every fare received. To make matters a bit worse, fares start at $3.10 and haven't increased in seven years. With the price of gas getting out of control (currently in the $4.30 - $4.50 per gallon range in the city), this makes it hard for cab drivers to make a solid living.
Now, I don't take a ton of cabs, but if I'm out with a group of people and we're all relatively far from home, taking a cab and splitting the fare often seems like the most logical choice.
I took a cab the other day operated by the San Francisco Taxi Cab Company, which not only takes credit cards, but advertises on their windows which credit cards they accept. A group of us get in the car and we start heading home, at which point (and not until then) did the driver say, "It'll be cash only tonight, I'm not accepting credit cards." When we questioned why, his response was along the lines of "because they take 5% and I won't get my f*cking money until Wednesday (it was a Friday)."
At this time, I was unaware of the newly-imposed credit card fee, and was a bit taken aback by the driver's tone / attitude. I mean, as an accountant, I am well aware of costs of doing business, and to me, while it was unfortunate for taxicab drivers, this seemed to be a new cost of doing business. While these taxi drivers count on their fares for the day, my friend Brent pointed out that they would only need to take this hit up front. In other words, after the first few days, even though fares earned in a given day would not be received for 2-3 days, they would be receiving fares from the previous 2-3 days, which would ultimately cancel that out.
Therefore, the only real issue would be the 5% fee, which got me thinking. I know that 5% of a driver's daily take can be a significant amount of money to him/her, especially with the price of gas. But is it worth being a dick about? Is it worth losing out on a tip or losing someone's business altogether (assuming the driver refuses to take a credit card and the customer decides to try his/her luck with another cab).
In general, I would think that most people tip approximately 15%-20% for cabs, restaurants, services, etc. I generally like to tip 20%, mainly based on the facts that I live in a high-cost-of-living area, and and cab drivers, waiters/waitresses, etc. depend on tips to help make a living (I'm not judging, though).
I can only speak for myself, but when I use a cab, I find my experiences / thought process to follow one of the following scenarios:
Scenario A - Driver is a dick about me paying cash when he clearly has an operational credit card machine. I reluctantly pay cash (if I even have any) and don't give a good tip (10%) due to the shitty service.
Scenario B - Driver says he only accepts cash, I ask if he will take a credit card, he says "no, cash only." Because I only have credit card, I find a new cab and driver keeps looking for business.
Scenario C - Driver asks if I can pay cash, I say that all I have is a credit card, he agrees that is fine. Driver is friendly and treats me with respect. I tip at least 20% and probably round up to the nearest 50 cents or dollar to help him make up for his 5% hit.
Scenario D - Drivers asks if I can pay cash, I ask if credit card is okay and he says he's sorry, but he can honestly only take cash or he genuinely prefers only cash. In this scenario, he may/may not be telling the truth, but as long as he seems genuine/remorseful/caring about the situation, I don't mind paying cash and leaving a normal tip, even though I don't generally have much cash on me.
While these aren't the only scenarios that could play out, they demonstrate my general opinion towards this issue. I have no problem tipping someone for doing well at their job, and that includes demonstrating high quality customer service. Even though they prefer cash, it's ultimately more beneficial to them if I pay a $10 fare with a credit card and leave a $2.50, less a 5% charge, vs. them being mean / demanding / disrespectful and me paying somewhere between $10 - $11.
Overall, I guess my recent thoughts regrading this issue really made me realize that treating people with respect, delivering high quality customer service, and being a good person, especially in the face of a little adversity, can really pay dividends. In some ways, literally.
I have no problem paying a little extra to help out my fellow man, especially if I feel the respect or kindness is reciprocated somehow. With credit cards being the way of the future, it will be interesting to see how things shake out, especially if there are no base fare increases in the near future, not only in San Francisco, but in cities around the country. I guess we will all have to stay tuned.
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