Why do London taxis still make us pay in cash?

Dinosaurs drive among us.

I think we’ve all been there. You’ve finally managed to grab a cab somewhere in Soho after scrambling to get home for an hour and a half on a Saturday night. Once you get in you realise that you’re out of cash and moreover, as usual, this taxi doesn’t take cards. So instead of getting home quickly, your cabdriver takes a detour to get you past an ATM on the way. You easily end up trying out a few cash points, because the first one was out of money and the second had technical problems. What was supposed to be a fifteen-minute ride home has turned into a 25-minute tour of London, all the while adding to the mounds of pollution in the city air. Lovely. 

As a native Dane it has been a rude awakening living in London and realising that an overwhelming majority of taxis do not accept cards. Most other European countries have long since implemented electronic payment systems in taxis on a national level. In Denmark, card swipe machines were replaced for chip and PIN devices last year, after the cabs had enjoyed card payments for more than two decades. According to representatives of the Danish and German taxi industry, the ability to pay by card heightens security for the cab driver in that payment is guaranteed. It has also given the industry a much-needed boost, in that more people are taking longer journeys in taxis, since they can rely on the security and ease of paying by card.

Somehow, this development has eluded London's taxis. Here it's common practice for cabs to drive past an ATM if a customer is without cash, making the trip more expensive for the customer. Not to mention, that the cab emanates even more CO2 when it is kept at a standstill for several minutes while the transaction is being made.
But never mind the environment (note the sarcasm). In an automobile and diesel heavy industry, this is not the argument that will win over the taxi industry. Like one card-accepting cabdriver said to me this weekend: "We have some dinosaurs in this industry. I don't get why they can't understand that this would be better for all of us?! We would get longer trips, more customers and we'd be far more sure of getting paid."

Lately, apps like Hailo and GetTaxi have been developed to make electronic payments possible in taxis via tablet or smart-phone. I have personally used both apps regularly, refusing to partake in the cash-chaos. And they’re effective. With a little click you can easily order a nearby cab within seconds and once you’ve put in your details the payment is made securely via your credit or debit card at the end of your journey. In my opinion, it’s pretty brilliant to make the stress of getting home after hours in London, a lot easier. But even these systems have some serious issues for customers and taxis alike.

One app-accepting cabdriver recently informed me that customers using Hailo need to watch out for the amounts deducted on their account. Because the app doesn’t entail end-of-journey approval of the final amount, some London cabdrivers have begun exploiting the app by driving on and debiting the customer for more than the journey itself. Now we aren’t talking about major amounts, but nevertheless, this is payment fraud. Another issue is that not every cab has signed up with these apps, making it sometimes impossible to get a free cab via the app. And in that case, you’re just back to square one.

So if the apps can’t always be relied on for electronic payments and card terminals aren’t being installed in the taxis, then what are we supposed to do? I’m far from the only one frustrated with this situation. Friends and colleagues alike have often complained about the necessity for cash when taking a cab. Not to mention that a massive tourist destination like London, should be considering the amount of foreign customers who are not prepared to pay for their cabs by cash. It’s just not customer-friendly or for that matter, very modern. So why does paying for a cab via card have to be such a hassle?

As far as I can understand, the issue of implementing card payments is an on-going discussion for the taxi industry in London. It seems to me that the benefits regarding security, increased earnings and the environment are great, whereas I don’t quite see the negatives of implementing card payments. People will still pay cash if they can or prefer. Yes card transactions have fees – but these are usually directed at the customers and will therefore have minimum impact on the cab drivers themselves. So what is the problem? I guess only the dinosaurs can answer that.

Photograph: Getty Images

Sandra Kilhof Nielsen is a freelance writer and former reporter for Retail Banker International, Cards International & Electronic Payments International.

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.