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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Michael Gove's quiet revolution could transform prisoner education

To anyone with a passing interest in prisoner education it is clear that current levels of education and training are simply inadequate.

Justice Secretary Michael Gove is quietly embarking on the most substantive prison education reform programme for a generation. In September, Gove announced that Dame Sally Coates would chair a review of the provision and quality of education in prisons, the results of which are expected shortly.

To anyone with a passing interest in prisoner education it is clear that current levels of education and training are simply inadequate. In 2014, Ofsted reported that education levels across the British prison system were inadequate, suggesting that “very few prisoners are getting the opportunity to develop the skills and behaviours they need for work.” Between 2011/12 and 2013/14 the number of prisoners achieving a level 1 or 2 qualification in Mathematics fell by a third, and since 2010 the number of prisoners studying for an Open University degree has dropped by 37%.

In light of these damning statistics, Gove’s calls for prisons to become “places of education” is to be welcomed. The most obvious result of improved opportunities for training and education is that upon leaving prison offenders will be more likely to secure employment and less likely to reoffend. Less tangible, but no less important, limited opportunities for education hinder aspiration and prevent the justice system from acting as a conduit to improving society at large. Too often offenders are unable to develop their potential as citizens and contribute accordingly. Education is a powerful force in building offenders’ confidence and helping to engage with their communities upon release: helping to break the cycle of offending.

In tandem with enhanced opportunities for education, skills and training, Gove has promised greater autonomy for prison governors. Currently, the Skills Funding Agency manages the Offenders’ Learning and Skills Service (OLASS) to connect offender education with mainstream provision. Speaking before the APPG on Penal Affairs, Dame Sally suggested that “many governors feel very frustrated by their lack of ability to have any say in the education delivered.  If we want the governors to be accountable, they have to have the autonomy to contract for this for themselves, or employ their own teaching staff.”

The principle of increased flexibility is a good one. A significant minority of prisoners already have qualifications and require opportunity to build upon them. The education pathways available to them will be quite different to those offenders who enter prison with limited numeracy and literacy skills. However, the high-profile failure of private suppliers to deliver even the most basic services, raises questions as to whether major outsourcing firms will be able to provide these.

In 2014, A4E prematurely pulled out of a £17m contract to deliver education and training to prisoners in 12 London prisons on the grounds that it was unable to run the contract at a profit. This was not the first time that A4E had prematurely terminated a prison education contract. In 2008 the firm ended a similar contract to provide education in eight Kent prisons, again citing huge losses.

Recognising such failures, the Prime Minister has argued that his government’s reform program would “allow new providers and new ideas to flourish”, but the steps to achieving this are unclear. Identifying the difficulty smaller providers – particularly those from the third sector – currently have in winning and delivering contracts is a far easier task than redesigning the contracting system to improve their chances.

There are three steps that could act as a starting point. First, a review of commissioning to ensure a plurality of providers, particularly from small and medium-sized organisations should be considered, with payments-by-results the favoured means of remuneration. Second, providers and experts should be empowered to contribute to the reform process that follows the Coates Review’s publication. Third, it is clear that while a universal standard of education must be set, providers and governors should be empowered to experiment and innovate to seek results above this. In sacrificing universality it may be possible to improve methods and achieve better results in future.

Reforming the prison system is not a task that will be easy, nor one that will be quick. To ensure its long-term success it is vital that education and skills providers’ voices are heard and that the government develops forums through which ideas can be shared. For too long talent, resources and time have been wasted through mismanagement and poor provision. Now is the time to reverse this and ensure that the justice system delivers rehabilitation and improved educational outcomes.