For the second time since all Washington taxicabs were required to accept credit card and smartphone payments starting Oct. 1, a company approved by regulators to process those transactions in the backseats of cabs is having major problems.
Two weeks after the D.C.-based tech startup Hitch was swamped by taxi drivers’ complaints that their fares were not being deposited into their bank accounts, another D.C.-approved payment service provider (PSP) is entirely collapsing.
U.S.A. Motors notified the more than 900 drivers who are using its payment processing system their contracts would be canceled effective Nov. 30, leaving the drivers searching for a new credit card system to keep their vehicles on the road.
“This email is to give you notice that U.S.A. Motors, Inc. is terminating our agreement (termed the Payment Service Agreement and TaxiRadar® License) to provide you with Payment Service Provider and technology options, effective November 30, 2013. Pursuant to the Payment Service Agreement and TaxiRadar® License, this agreement may be terminated at any time,” the company’s notification to drivers said.
Neither the email notification nor a statement issued by the D.C. Taxicab Commission specified the reason for cancellation, but an industry source said the hardware U.S.A. Motors installed in the cabs — made by the tech company TaxiRadar — was simply unreliable, experiencing frequent crashes and payment delivery problems. Individual drivers have said the TaxiRadar equipment failed so frequently their customers often were forced to pay cash upon arriving at their destinations, or they just turned the system off entirely at the start of their shifts.
Attempts to contact U.S.A. Motors and TaxiRadar were unsuccessful. The voicemail system answered calls to U.S.A. Motors but was full, and no one answered the phone at TaxiRadar on Tuesday.
The D.C. Taxicab Commission said cab drivers who were dumped by U.S.A. Motors will have options to transfer to a new payment processing company.
“USA Motors informed DCTC of arrangements to allow vehicle owners to transfer on a no-cost basis to Creative Mobile Technologies or Transco, Inc. for installation and servicing of the Modern Taximeter System (MTS). DCTC offered no objections provided that installations were scheduled within the next seven days and completed by November 30, 2013,” a commission statement said.
The cancellation infuriated cabbies because they threw away hundreds of dollars installing the U.S.A. Motors system.
“This is disgusting,” said driver Abebe Zewdu, who wondered why the company was approved to operate in Washington. “The taxicab commission from the beginning, before giving the license to do this business, has to do something to build confidence.”
“This is terrible. After they collected from each driver $550 through the process... they went out of business. That's really kind of scamming people,” said Tariku Bekele.
“I spent $500,” said Abdul Yasir, who learned of the cancellation from this reporter. “This is the first time I have heard. I have no idea what happened. Now I have to find another company to install it.”
The problems experienced by Hitch and U.S.A. Motors are raising questions among cab drivers about the vetting process of the D.C. Taxicab Commission as it mandated universal credit card acceptance.