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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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.