Ask any frequent taxi rider if they’ve ever had a problem using a credit card in a cab, and you're likely to hear a list of grievances. Cabbies and cab companies seem to simply hate it.
In most major U.S. cities, taxi drivers are required by law to accept credit cards, but some drivers will do whatever they can to get customers to use cash. The main reason is the expense associated with accepting cards. These costs come in two forms:
The initial installation of payment terminals
The fees they must pay each time a customer swipes her card
Installing card readers can’t be avoided — again, in most cities cabbies are obligated to take credit cards. If they’re caught without the necessary equipment, they could face steep fines.
But fees are another story. The fewer customers that use credit, the less drivers will have to shell out in fees. This is what leads some cabbies to use sketchy tactics to persuade customers to use cash. Common examples are claiming the credit card terminal is broken or simply refusing to take passengers who don’t have cash — both of which are illegal in most cities.
Card transactions are secure — usually
Is your payment information safe in a cab?
In general, there’s no reason using a credit card in a cab should be less secure than other types of transactions. Although the type of card reader cabbies are required to use varies by city, most are just mobile versions of the terminals that brick-and-mortar retailers use. Also, in an effort to cut costs, many cabbies have started using Square, which fully encrypts your card information.
Even so, there are a few considerations unique to cabs that might make transactions slightly riskier. Many payment terminals are located in the backseat. This means the driver has relatively little ability to see what’s going on back there, so it’s fairly easy for an unscrupulous customer to install a credit card skimmer on the machine. Again, this is a risk you could face at any retailer, but in a cab it’s somewhat easier to get away with.
And although most cab drivers are honest and hardworking, there have been accounts of drivers intentionally overcharging passengers. This is a fairly easy offense to get away with because most passengers are unfamiliar with taxi fare structures, especially if they're away from home.
Tips for using cards in taxis
Using a credit card in a cab is common practice for many people, and it’s usually perfectly safe. Just be sure to follow the Nerds’ tips for safe swiping in taxis:
Pay careful attention to the meter. If your fare suddenly jumps when you're about to run your card, ask why. In most cases, it’s illegal to be charged extra for using a credit card, so be sure to speak up.
Look at the credit card terminal carefully before you use your card. If anything seems suspicious, use cash instead.
Keep your receipt and check it against your credit card statement. If the charges don’t match, contact your credit card company immediately.
Read the sticker on the inside window of the cab to be sure you fully understand how your fare is calculated. If the fare chart isn't posted in the cab, ask the driver for a copy.
If you have any concerns about the driver, write down the taxi’s medallion number. This way, it will be easier to report the cabbie if a questionable charge shows up on your statement.