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.

Photo: Getty
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After Richmond Park, Labour MPs are haunted by a familiar ghost

Labour MPs in big cities fear the Liberal Democrats, while in the north, they fear Ukip. 

The Liberal Democrats’ victory in Richmond Park has Conservatives nervous, and rightly so. Not only did Sarah Olney take the votes of soft Conservatives who backed a Remain vote on 23 June, she also benefited from tactical voting from Labour voters.

Although Richmond Park is the fifth most pro-Remain constituency won by a Conservative at the 2015 election, the more significant number – for the Liberal Democrats at least – is 15: that’s the number of Tory-held seats they could win if they reduced the Labour vote by the same amount they managed in Richmond Park.

The Tories have two Brexit headaches, electorally speaking. The first is the direct loss of voters who backed David Cameron in 2015 and a Remain vote in 2016 to the Liberal Democrats. The second is that Brexit appears to have made Liberal Democrat candidates palatable to Labour voters who backed the party as the anti-Conservative option in seats where Labour is generally weak from 1992 to 2010, but stayed at home or voted Labour in 2015.

Although local council by-elections are not as dramatic as parliamentary ones, they offer clues as to how national elections may play out, and it’s worth noting that Richmond Park wasn’t the only place where the Liberal Democrats saw a dramatic surge in the party’s fortunes. They also made a dramatic gain in Chichester, which voted to leave.

(That’s the other factor to remember in the “Leave/Remain” divide. In Liberal-Conservative battlegrounds where the majority of voters opted to leave, the third-placed Labour and Green vote tends to be heavily pro-Remain.)

But it’s not just Conservatives with the Liberal Democrats in second who have cause to be nervous.  Labour MPs outside of England's big cities have long been nervous that Ukip will do to them what the SNP did to their Scottish colleagues in 2015. That Ukip is now in second place in many seats that Labour once considered safe only adds to the sense of unease.

In a lot of seats, the closeness of Ukip is overstated. As one MP, who has the Conservatives in second place observed, “All that’s happened is you used to have five or six no-hopers, and all of that vote has gone to Ukip, so colleagues are nervous”. That’s true, to an extent. But it’s worth noting that the same thing could be said for the Liberal Democrats in Conservative seats in 1992. All they had done was to coagulate most of the “anyone but the Conservative” vote under their banner. In 1997, they took Conservative votes – and with it, picked up 28 formerly Tory seats.

Also nervous are the party’s London MPs, albeit for different reasons. They fear that Remain voters will desert them for the Liberal Democrats. (It’s worth noting that Catherine West, who sits for the most pro-Remain seat in the country, has already told constituents that she will vote against Article 50, as has David Lammy, another North London MP.)

A particular cause for alarm is that most of the party’s high command – Jeremy Corbyn, Emily Thornberry, Diane Abbott, and Keir Starmer – all sit for seats that were heavily pro-Remain. Thornberry, in particular, has the particularly dangerous combination of a seat that voted Remain in June but has flirted with the Liberal Democrats in the past, with the shadow foreign secretary finishing just 484 votes ahead of Bridget Fox, the Liberal Democrat candidate, in 2005.

Are they right to be worried? That the referendum allowed the Liberal Democrats to reconfigure the politics of Richmond Park adds credence to a YouGov poll that showed a pro-Brexit Labour party finishing third behind a pro-second referendum Liberal Democrat party, should Labour go into the next election backing Brexit and the Liberal Democrats opt to oppose it.

The difficulty for Labour is the calculation for the Liberal Democrats is easy. They are an unabashedly pro-European party, from their activists to their MPs, and the 22 per cent of voters who back a referendum re-run are a significantly larger group than the eight per cent of the vote that Nick Clegg’s Liberal Democrats got in 2015.

The calculus is more fraught for Labour. In terms of the straight Conservative battle, their best hope is to put the referendum question to bed and focus on issues which don’t divide their coalition in two, as immigration does. But for separate reasons, neither Ukip nor the Liberal Democrats will be keen to let them.

At every point, the referendum question poses difficulties for Labour. Even when neither Ukip nor the Liberal Democrats take seats from them directly, they can hurt them badly, allowing the Conservatives to come through the middle.

The big problem is that the stance that makes sense in terms of maintaining party unity is to try to run on a ticket of moving past the referendum and focussing on the party’s core issues of social justice, better public services and redistribution.

But the trouble with that approach is that it’s alarmingly similar to the one favoured by Kezia Dugdale and Scottish Labour in 2016, who tried to make the election about public services, not the constitution. They came third, behind a Conservative party that ran on an explicitly pro-Union platform. The possibility of an English sequel should not be ruled out.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.