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Come June, Minneapolis taxis must accept credit cards

Come June, your credit card must be accepted by taxicab drivers licensed in Minneapolis, but don’t expect them to be happy about your method of payment.

And don’t expect members of the City Council, who today approved the credit card requirement, to claim total victory.

“This clarifies that a taxicab driver cannot reject a fare based on method of payment,” said Council Member Gary Schiff, who has been pushing for the acceptance of credit cards. Schiff earlier delayed the requirement to see if there were some way to shift the credit card use fee away from the taxicab drivers. 

As it turns out, Visa, MasterCard and Discover all have contracts that prohibit shifting the fee to the customer.  And although the City Council can regulate what drivers wear, when they can use their cell phones and what the meter rates are, there is not much they can do about their contracts with the credit card companies.

Council Member Meg Tuthill, who owned her own business before serving on the council, expressed sympathy for the drivers but cautioned them against trying to pass along the credit card fees.  “They do check, and they do bust you,” she said.

“The City Council should ban any charge that goes below the meter rate,” said Yemane Mebrahtu, president of the Minneapolis Taxicab Owners Organization.  He explained that taxicab owners work, in turn, for a taxicab company, which passes along credit card fees and service fees to the drivers.

It is not unusual, according to Mebrahtu, for drivers to pay the 3 percent credit card fee plus another 2 to 4 percent as a service fee to the taxicab company.

Council Member Lisa Goodman, who represents the downtown and uptown areas, sees credit card acceptance as a public safety issue.  Bar patrons “can’t get on a bus with a credit card,” but they still need a safe ride home at closing time.  She suggested drivers who want to avoid the credit card fees offer a discount for cash.

“I do have sympathy that every layer of cost added to a business makes it more difficult to survive,” said Council Member Sandy Colvin Roy, who asked that city staff study options Minneapolis might have in terms of credit-card swipe fees.  

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Comments (1)

The article says "Visa, MasterCard and Discover all have contracts that prohibit shifting the fee to the customer". But that would seem to be at odds with a Strib quote in January 11th's morning Glean which discusses "a 2.45 percent credit card transaction fee to be charged to the customer. Visa doesn't allow such fees to be charged at the point of sale, but MasterCard and Discover do".

Can anyone offer an explanation for the discrepancy?