How do taxis still get away with a 5% credit card surcharge?

Mattg

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Since 2016, there have been laws in Australia that limit card payment surcharges to the actual cost of accepting credit card payments. Yet, most taxi companies in Australia that I'm aware of continue to add a 5% surcharge for card payments.

Why is this still happening? Is this even legal?
 

OZDUCK

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Below is a short article from 2015 when Cabcharge was forced to reduce its surcharge to 5% including expressions of hope that the rate would drop further - yeah very likely.

 
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oz_mark

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Perfectly legal

The ban does not apply to any payments made for taxi services. Taxi services were excluded from the RBA standard because the industry is already regulated by state and territory regulators.

 

Mattg

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Perfectly legal




Good to know.

I wonder why the state and territory regulators haven't taken any action against this, in that case?
 

jastel

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What about uber taking a 25-30% surcharge out of your fare...nobody caps it at 5% or complains about that....or is taking it from the driver different to taking it from the customer?

Either way you pay...unless you use cash...no surcharge there.
 

knick007

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The main people who catch cabs are business folk. When was the last time you got a cab home after a night out?
 

odysseus

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What about uber taking a 25-30% surcharge out of your fare...nobody caps it at 5% or complains about that....or is taking it from the driver different to taking it from the customer?

Either way you pay...unless you use cash...no surcharge there.

That's because they're providing the service (which includes credit card payment) and who you book with - you don't book directly with the driver, then they take 25% out of that. So for the service and infrastructure they provide, people pay to uber what they think it's worth, and it's quite different from an optional ancillary service like credit card payment in taxis.

And if uber switch to robot drivers/self drive cars in future without drivers, do you think you would pay 25% less...?
 

samh004

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Great article, which helps reinforce why I shouldn't take taxis and when they get lippy with the driver of my uber or me – which they increasingly do – I'll have a good argument to fire back with ;)
 

jastel

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That's because they're providing the service (which includes credit card payment) and who you book with - you don't book directly with the driver, then they take 25% out of that. So for the service and infrastructure they provide, people pay to uber what they think it's worth, and it's quite different from an optional ancillary service like credit card payment in taxis.

And if uber switch to robot drivers/self drive cars in future without drivers, do you think you would pay 25% less...

Uber or Cabcharge or whatever other independent taxi/rideshare company normally provide the credit card service and the booking or dispatch service...what's the difference?

In neither model do you normally book directly with the driver.
Leaving aside the insurance and legal implications of doing a "cashie" with an uber driver it should be about 25% less for sure...as no service was provided by uber.

Uber's 25% charge covers their dispatch and all other costs as well while the taxis costs are generally included in the higher fare...which the driver collects from you and pays a percent to the operator, who then pays fees to the dispatch company.

Taxis 5% fees are purely for CC fees and infrastructure which as you said are OPTIONAL...pay cash.
 

odysseus

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Uber or Cabcharge or whatever other independent taxi/rideshare company normally provide the credit card service and the booking or dispatch service...what's the difference?

In neither model do you normally book directly with the driver.
Leaving aside the insurance and legal implications of doing a "cashie" with an uber driver it should be about 25% less for sure...as no service was provided by uber.

Uber's 25% charge covers their dispatch and all other costs as well while the taxis costs are generally included in the higher fare...which the driver collects from you and pays a percent to the operator, who then pays fees to the dispatch company.

Taxis 5% fees are purely for CC fees and infrastructure which as you said are OPTIONAL...pay cash.

The difference is in one you're paying a bundle/package price for a whole bunch of services, and in the other you're paying a surcharge for an optional extra. Just as you pay a surcharge to Qantas, or a hotel, or petrol station for paying with a credit card.

Whereas in the first you're paying for a package, just as with airbnb, or even a travel agent for a travel booking with transfers, and hotels, and tours and flights, or even a hotel booking through anyone but the hotel e.g. booking.com, or a TA. Commission is rolled up into all those models, the same as uber.
 

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