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actual cab fare charged to your credit card account?

Discussion in 'Open Discussion' started by ioki, Oct 20, 2005.

  1. ioki

    ioki Member

    Apr 6, 2004
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    dear ff ppl,

    i just happened to noticed something odd with cab fares on the credit card statement.

    isn't "10%" on top of the fare is what we pay for the privilage of using one's credit card when going by cab? the nominal percentage amount is also shown on their website.

    anyhow, i've worked out a deal with a silver service guy and he charges me $75/trip to and from the airport.

    thus, i've been expensing $75 X 1.1 = $82.5 back to my company.

    now, the credit card statement line shows $83.25 which is $75 X 1.11 or 11%
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    so should i be raising this nominal difference in the eventual amount with the cab company, cab charge or my bank? or have i calculated wrong somehow?
     
  2. Sequel

    Sequel Member

    Aug 30, 2005
    475
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    Brisbane
    You get charged an extra 10% service fee for the "privilege" of using your card, and then of course Johny wants his 10% on top of that. Therefore it is actually 11% more expensive to use your card. And the service fee is bassed on the fare including GST, so both Johny and the cab company are double dipping.
     


  3. oz_mark

    oz_mark Enthusiast

    Jun 30, 2002
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    ...and unless the credit card company has an extraodinarily bad deal with the CC company, they aren't paying the CC company 10% for using the card. They must be making a tidy profit on this little scam.
     
  4. ioki

    ioki Member

    Apr 6, 2004
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    do agree the cabcharge ppl do a pretty tidy sum on the whole deal.

    but, if i signed my docket with the wording of 10% charged and in good faith that i had thought is all i will pay extra for, and eventually i am charged 11%.. should that not be wrong? or even fraud?
     
  5. aus_flyer

    aus_flyer Established Member

    Feb 15, 2005
    1,361
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    Brisbane
    I've struck the same thing. If you inspect your tax invoice carefully you will see that the 10% cabcarge fee is subject to 10% on top.

    So, 10% plus 10% is 11%
    ie. 10% x 1.1 = 11%
     


  6. ioki

    ioki Member

    Apr 6, 2004
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    DOH!! so i've actually lost 75c X 10 odd trips taken in the few month in expenses not claimed..

    thus mystery solved. =p
     
  7. NM

    NM
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    Aug 27, 2004
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    I use a Limo driver for my home-airport trips. He charges me a flat $40 fee and bills directly to Diners Club or Amex, so CabCharge don't get their 10% fee (plus GST), and it includes the taxi pickup fee charged by the airport.

    So his $40 fee ends up costing the same as a $35 cab ride. And on the occasions when I have not pre-planned and booked him, the meter on the cab has run between $34 and $37 depending on which way they go and the amount of traffic.
     
  8. danielh

    danielh Member

    Dec 5, 2003
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    Always 1.11 times your Taxi Fare if you used a credit card.

    Regards
    Daniel
     
  9. JohnK

    JohnK Veteran Member

    Mar 22, 2005
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    I have a manual cabcharge receipt in front me.

    On one side is printed "10% SERVICE FEE APPLICABLE ON STATEMENT". This is the side you see the most as it has all the relevant trip details. Clever marketing at play :?:

    On the other side is printed "10% SERVICE FEE APPLICABLE ON STATEMENT ATTRACTS GST ON ALL CARD TYPES EXCEPT CABCHARGE CHARGE CARDS".

    I cannot see any full stops so not sure how to interpret above statement :? The power of words

    I also have a cabcharge tax invoice paid by credit card in front of me which has the total fare + service fee + GST on service fee. Interesting to find out how much GST they are reporting to Little Johnny Arthur. Tax on a tax :shock:, no way :eek: , honest Little Johnny Arthur promised this would never happen. :roll: :oops:

    Not just credit cards. :shock: "ALL CARD TYPES EXCEPT CABCHARGE CHARGE CARDS". Would take that to mean savings accounts as well as credit cards. :?
     
  10. Dave Noble

    Dave Noble Senior Member

    Oct 10, 2005
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    Yes. It is a nice little money making scam

    Dave
     
  11. Kiwi Flyer

    Kiwi Flyer Senior Member

    Sep 24, 2004
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    I was shocked when got caught by this - never again!

    Outrageous surcharge - the taxis back in NZ charge zip for credit card.
     
  12. NM

    NM
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    Aug 27, 2004
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    Important note:

    This is not the taxi, nor the taxi company (ie Black & White cabs, Yellow Cabs, Silvertop etc) that is charging the 10% serviec fee for using a credit card. It is a company called CabCharge that is collecting the 10% fee. Most taxis chose to use the services of Cabcharge because it means that each taxi driver does not need to have their own merchant agreement with the various credit card companies.

    So the credit card is billed by Cabcharge for the fare amount (including GST) plus a service charge added by Cabcharge (10%) plus the GST payable on the service fee. There is no tax on a tax here. The GST is paid on the service fee (it is a service so therefore attacts GST). It just happens that Cabcharge choose to set the amount of the fee to be 10% of the fare amount including GST. They could choose to make the service fee anything they like, such as a flat $10, which would also attract 10% GST since it is a service.

    Many cab drivers complain about the company Cabcharge because the driver does not get paid the fare amount from Cabcharge for several weeks. So not only does Cabcharge get the 10% (immediately since they have the merchant agreement with the banks/CC companies), but they also have the use of the fare amount for several weeks before passing it back to the driver. Of course the driver has already had to pay his company their portion of the fare amount as calculated from the meter at the end of the driving shift.

    Consequently, some drivers prefer to imply their electronic machine is not operating and they need to process the transaction manually. The manually processed slips then become a form of currency within the taxi industry and the driver can exchange them for cash from other companies that have setup similar to Cabcharge who will also add the 10% service fee (plus GST) when they charge it to your credit card. So sometimes you will see the CC billed by an organisation other than Cabcharge when the transactions have been manually processed by the taxi drivers. One such company is [url=http://home.iprimus.com.au/globalgroup/gmcabs/about.htm[/url] and I am sure others can report other similar companies from their credit card statements.
     
  13. ioki

    ioki Member

    Apr 6, 2004
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    not quite true!! =)

    i know of just one company in AKL that doesn't charge.. Corporate Cabs

    all others do.. $1 for regency and i think other cab firms goes on a percentage and capped at NZD$2 at most.. certainly nothing like the highway robbery in oz..

    i've spent the best part of this yr in AKL for a project... so have racked quite a bill in cab fares especially in AKL. =p
     
  14. Kiwi Flyer

    Kiwi Flyer Senior Member

    Sep 24, 2004
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    There are some Auckland cab companies that say they will charge but actually dont.

    I use cabs regularly, always charge it, and to date have never been charged for using credit card in NZ.
     
  15. arun

    arun Member

    Sep 5, 2002
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    Sydney
    I might sound controversial, but.....
    CABCHARGE is a business that act as a middleman between the taxis and banks. They also have cabcharge vouchers that we use a lot for adhoc travel (people working late, etc,) . Cabcharge vouchers remove the need to provide everyone who takes a taxi (on business) to have a company credit card. I think it is a good service.

    10% is the fee that collect for running their business. They will obviously have their overheads includng the credit card processing fee. In my opinion every business will try to maximise the profits. If 10% is exorbitant, then I am sure, many more companies would have entered the market with lower cost alternative.

    10% GST is for Johnny. You can not b;lame CABCHARGE for that. You may argue that they should absorb that into their 10%, but hey, we know very few businesses absorbed the GST.

    Just to let you know that I do not wk for CABCHARGE!!!
     
  16. Mal

    Mal Enthusiast

    Dec 25, 2004
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    I also use paper Cabcharges as I don't have a work charge card. They serve a particular purpose well.

    Additionally, there is a large amount of infrastructure tied into the Cabcharge system that makes it expensive to use - hence the additional cost.

    However, in regard to other companies, a little history about the company and how they were formed would help determine why they are in the situation they are in.

    Look at their beginnings. Look at their top shareholders. They are firmly engrained into the taxi industry. There is extremely little chance of a competitor taking away their business...
     
  17. JohnK

    JohnK Veteran Member

    Mar 22, 2005
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    You are absolutely right Cabcharge could have chosen any %amount/flat amount as a service charge, but they chose 10% of the taxi fare + GST which in my book is a tax on a tax. :? Pretty poor choice and open to questions. :? Also when you look at the manual cabcharge receipt their is a contradictory statement on one side of the receipt to the other. :? Clever marketing one thinks.

    You see service charges all over SE Asia but their reporting seems to be smarter and only charges the service charge on base amounts excluding GST. A little bit easier to comprehend.
     
  18. Dave Noble

    Dave Noble Senior Member

    Oct 10, 2005
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    I agree with you that the 11% surcharge is excessive and I believe that they are trying to obfuscate the charge to make it look like 10%. I do my best to avoid using them unless I haver no choice

    Dave
     
  19. oz_mark

    oz_mark Enthusiast

    Jun 30, 2002
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    Yes it is a good service, but as far as I am aware you only pay the price that comes up on the meter.

    10% is the fee they collect for using a credit card. The credit card company takes a couple of percent and cabcharge keeps the rest.

    A few years ago, many taxis refused to accept Visa, primarily because Visa refused to allow Cabcharge to add 10% onto the fare cost for using it.

    But because of the way Cabcharge are calculating things, a portion of the GST is being paid on GST.
     
  20. serfty

    Moderator

    Nov 16, 2004
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    I've had a cabcharge account for over 10 years. I prefer to use vouchers as it saves a minute or two at the end of the ride.

    They always charged a 10% commission. When GST came in there was something called a GST equalization factor which (to cut a long story short) meant the amount effectively paid was still around the 10%.

    About two years ago they gave up on such smoke and mirrors and now charge 10% inclusive of GST.
     
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