Agenda Item 6B
March 1,2016
Action
MEMORANDUM
February 26, 2016
TO:
FROM:
SUBJECT:
County Council
M
~
Josh Hamlin, Legislative Attomer-'
Action: Expedited Bill 53-15, Taxicabs - Credit Card Transactions
Transportation, Infrastructure, Energy and Environment Committee recommendation
(3-0): enact Expedited Bill 53-15 with amendments.
Expedited Bill 53-15, Taxicabs - Credit Card Transactions, sponsored by Lead Sponsors
Councilmembers EIrich, Riemer and Navarro, was introduced on December 8, 2015. A public
hearing was held on January 19 and a Transportation, Infrastructure, Energy
&
Environment
Committee worksession was held on February 4.
Bill 53-15 would:
(1)
limit the amount a licensee may charge a driver or affiliate for processing a
credit card transaction;
(2)
amend the requirements for credit card processing systems in taxicabs; and
(3)
generally amend County law concerning taxicabs.
Expedited Bill 53-15 would refine existing provisions of the law related to processing
credit card payments for taxicab service. These provisions were added to the law by Expedited
Bill 53-14, which was enacted earlier this year and substantially revised Chapter 53. Specifically,
the Bill will prohibit licensees from charging drivers and affiliates more than the actual cost to the
licensee for processing a credit card transaction, and will make it easier for drivers to use their own
credit card processing systems.
Background
The County's taxicab law was substantially revised in 2015 by Expedited Bi1l53-14. That
Bill made a number of changes aimed at improving conditions for drivers and allowing the taxicab
industry to better compete with transportation network companies such as Uber and Lyft.
Expedited Bill 53-14 established a Taxicab Services Commission to evaluate the economic
condition of the taxicab industry and the adequacy of service rendered by the industry. The Bill
also made a number of changes to the requirements of taxicab leases and operating agreements,
including requiring the County Executive to establish standardized lease/affiliation agreements,
maximum lease and affiliation rates and permissible ancillary fees that may be charged to drivers.
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The Bill also provided for the issuance of new passenger vehicle licenses to increase the number
of accessible taxicabs on the road.
Among the driver protection provisions included in Bill 53-14 were changes to the law
aimed at (1) limiting the premium that fleets could pass along to drivers for processing credit card
transactions and; (2) making it easier for drivers to choose their own credit card processing
mechanism. Under the law as amended Bill 53-14, a fleet or association may not charge a driver
more than "1% over bank, merchant services and equipment provider fees paid by the licensee on
any credit card transaction." Also, the law now allows drivers to use their own credit card
processing systems, provided the systems: (1) are compliant with all applicable tax laws; (2) accept
payment through any County user-side subsidy program ("Call-n-Ride"); and (3) are approved
by the Director of the Department of Transportation (DOT). It is these provisions that this Bill
proposes to modify. This Bill would provide that fleets and associations may only charge drivers
the amount paid by the fleets for processing credit card transactions (effectively changing the "1
%"
to "0%" in the existing law) and would remove the requirement that
all
credit card processing
systems accept Canon-Ride payments.
Public Hearing and Correspondence
A public hearing was held on January 19, at which there were four speakers. Acting DOT
Director Al Roshdieh testified on behalf of the County Executive, stating that the Executive "does
not object to this bill," but expressing concerns for possible unintended consequences (see ©9).
To address these concerns, he requested two amendments to the Bill, which will be discussed
below. Lee Barnes ofBarwood Transportation testified in opposition to the Bill, raising questions
about the definition of "processing" and pointing out that fleets incur more costs on credit card
transactions thanjust the fee charged by a financial institution.
Mr.
Barnes also expressed concerns
that the amendments proposed in Bill 53-15 would result in taxicabs having no way to process
Call-N-Ride
l
transactions, and would call into question the purpose of the Taxicab Commission
created by Bill 53-14 (see ©1D-l1). On February 3, Barwood also provided a chart that illustrates
the company's costs to process credit card transactions (see ©14)
Beth Levie of the AFL-CIO spoke in support of the Bill, providing hypothetical examples
of the impact of credit card processing charges imposed by fleets on driver income (see ©12-13).2
Peter Ibik, President of the Montgomery County Professional Drivers' Union, also spoke in
support of the Bill, echoing Ms. Levie's statements, and pointing out that, when using fleet credit
card processing systems, drivers do not get paid immediately for credit card transactions, as they
do for cash payments.
Mr.
Ibik noted that this delay in payment to drivers, which is sometimes
over a week, presents an impairment to the drivers' ability to make their daily rent payments, and
that allowing drivers to use their own processing systems would remove this impairment.
On February 3, staff received a letter from Cornerstone Montgomery expressing concern
that Bill 53-15's provisions allowing drivers to select their own credit card processing devices,
CalIoN-Ride is the County's "user-side subsidy program, which assists ... Participation
in
County user-side subsidy
programs in mandated by
§
53-222, which provides,
in
its entirety: "Any fleet or association must participate
in
the
County's user-side subsidy programs, as required by applicable regulations."
2
Barwood provided a counterpoint
to
Ms. Levie's examples, which indicates that fleet-wide, 43% of fares are
collected by credit card transaction (see ©16).
I
2
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subject to approval by DOT, will negatively impact the recently expanded 'Road to Independence'
program (see ©15).
Issues/Committee Recommendations
L.
Should the allowed premium on credit card transactions be eliminated?
The problem with the existing law:
Expedited Bill 53-14, as referred to the Council by the T&E Committee favorably (2-1),
would have capped the amount that a fleet could charge a driver for credit card processing at 5%
ofthe transaction. This cap was requested by a group ofdrivers as part ofa post-mediation position
statement, and is similar to the 5% cap imposed by the City of Alexandria (see ©17). Before
passage, however, the Bill was amended by the full Council to limit the amount of premium over
costs that a fleet could charge a driver, rather than set a hard 5% cap on the charge. In moving the
amendment, Councilmember Katz expressed a view that 5% might actually be too high, given his
understanding of processing charges for credit card transactions. As enacted, Bill 53-14 limited
the amount a fleet or association could charge a driver to "I
%
over bank, merchant services and
equipment provider fees paid by the licensee on any credit card transaction."
In October 2015, after this change went into effect, Barwood sent a message to drivers
informing them of the new law and, among other things, describing how Barwood would charge
credit card fees
to
drivers in light of the changes in the law (see ©18-19). Barwood's message
said that credit card fees would be charged as the "Technology Marketing and Service Fee"
(TMSF), which includes "all equipment provider costs, such as bank merchant fees, credit card
charge-back fees, transaction fees and air time fees, plus all fees for Call-n-Ride processing." In
accordance with the law which allowed them to recover their costs plus 1%, Barwood informed
drivers that the TMSF fee would be 7.45%.
In response to Barwood's message, seven members of the Council sent a letter to Acting
DOT Director Al Roshdieh, expressing concern about the amount ofthe charge and inquiring about
the Department's progress in identifying alternative credit card processing systems that could
accept payment through the County's user-side subsidy program (see ©20-21).3 The Montgomery
County Professional Drivers' Union also weighed in, with a letter to Acting Director Roshdieh
questioning the legitimacy of the amount of the TMSF and the restrictions on drivers' use of their
own credit card processing systems (see ©22-27).
In his January 15, 2016 response to the Councilmembers' inquiry (see ©28), Mr. Roshdieh
indicated that he "was unable to obtain sufficient detailed information from the fleets in order to
develop a specific breakdown of the percentages paid by the fleets to credit card companies."
Mr.
Roshdieh also indicated that DOT has not been able to identify any other credit card processing
devices capable of accepting payment through the County's Call-n-Ride program.
As mentioned above, this Bill would effectively reduce the 1% premium over costs
currently allowed to 0%, providing that "a licensee must not impose on a driver or affiliate a charge
of more than the fees paid by the licensee for processing any credit card transaction ..." At the
public hearing, Acting Director Roshdieh said that DOT currently does not have the ability to
3
The memorandum was signed by Councilmembers Katz, Eirich, Leventhal, Berliner, Hucker, Navarro, and Riemer.
3
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verify that companies are in compliance with the law, and requested an amendment to require the
fleets to certify to the Director that they are complying with the law.
4
Staff agrees that such an
amendment would strengthen the law, but still questions whether the certification would be
effective in ensuring compliance.
In addition to the concerns stated by Acting Director Roshdieh, Lee Barnes expressed
concern over the term "processing," pointing out that "the fee charged by a financial institution is
just one of the many costs taxicab companies incur when customers pay by credit card."
Mr.
Barnes's concern about the possible ambiguity in the use of the word processing, although the Bill
could be amended to simply remove the
"I
% over" from the existing law, accommodating the
other charges that Mr. Barnes alluded to, but eliminating any premium collected by the fleet.
5
Recommendation:
Council staff believes that the Committee made a well-founded recommendation when it
considered Expedited Bill 53-14, and recommends a return to that position. Amending the Bill to
prohibit a licensee from imposing on a driver or affiliate charges totaling more than 5% of a credit
card transaction would provide drivers with relief that staff believes was intended by the enactment
of Bill 53-14, while providing clarity and ease of administration.
Committee recommendation (3-0):
Amend lines
4-8
ofthe Bill as follows:
(f)
A licensee must not impose on a driver or affiliate:
(1)
[[a charge of]] charges totaling more than [1 % over bank,
merchant services and equipment provider] [[the fees paid
by the licensee [on] for processing any credit card
transaction]] 5% of any credit card transaction; or
2.
Should the requirement that all credit card processing systems accept payment
through County user-side subsidy programs be removed?
Expedited Bill 53-14 added the existing language, which allows drivers to use their own
credit card processing systems,6 provided the systems:
(1)
are compliant with all applicable tax
laws; (2) accept payment through Call-n-Ride; and (3) are approved by the Director of DOT.
During Committee worksessions, DOT requested language requiring that any system accept Call­
n-Ride payments. This requirement has had the unintended effect ofprohibiting drivers from using
their own processing systems, as commonly used personal systems such as Square
7
are not
This amendment was also suggested by Associate County Attorney Robert J. Birenbaum
in
his memorandum to
Acting Director Roshdieh, dated January 5, 2016 (see ©29-30).
5
It
is worth noting that, if the Bill is enacted to simply remove this premium, Barwood drivers will still be paying
6.45%, significantly more than the 5% cap recommended by the Committee
in
its consideration of Bill 53-14.
6
For a brief discussion of why drivers may wish to use their own processing system, such as Square, and the legal
status of its use in some jurisdictions, see http://www.geekwire.com/20 14itaxi-drivers-seattle-allowing-customers­
pav-squarei
7
Square is marketing its service specifically to Taxicab drivers: see https://squareup.com/taxi-credit-card-processing
4
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currently capable of accepting these payments. Drivers say the ability to use such systems is
important for two reasons: (1) to reduce their cost of processing the transactions
8;
and (2) to
eliminate the lag time between the transaction and the time the driver receives payment.
9
The Bill,
as introduced, simply removes the requirement that credit card processing systems accept Call-n­
Ride, but does not change the requirements of
§
53-222 that "[a]ny fleet or association must
participate in the County's user-side subsidy programs,
as required by applicable regulations."
(emphasis supplied)
Acceptance ofCall-n-Ride payment:
Both DOT and Lee Barnes of Barwood expressed concern at the public hearing that the
Bill as introduced could have the unintended effect of reducing the number of taxicabs capable of
accepting Call-n-Ride payments.
to
DOT has requested that language be added
to
the Bill to
expressly require that all taxicabs licensed to or affiliated with fleets and associations subject to
the participation requirements of
§
53-222 be able to accept Call-n-Ride payments. Council staff
believes that, given the language in
§
53-222, the Executive could impose the requirement that
taxicabs be equipped to accept Call-n-Ride payments by regulationY However, given the
importance of protecting Call-n-Ride participants' access
to
transportation, staff agrees that it is
appropriate to include the requirement in the law.
Adding this requirement (which, as a practical matter, already exists through
§
53-222 and
the regulations, while facilitating drivers' ability to process their own credit card transactions may
disrupt the business arrangements currently in place between some fleets and their processing
services. Mr. Barnes indicated that Barwood's provider, Verifone, would remove their equipment
if it was only used to process Call-n-Ride transactions. Verifone would do this, according to Mr.
Barnes, because the provider has an expectation that the equipment will generate significant
revenue from credit card transactions, and makes it profit from those transactions. Verifone' s
removal of its equipment, according to Mr. Barnes, would make it impossible for Barwood to
comply with the requirement.
DOT has provided some historical background on the transition from vouchers to the swipe
cards that are currently used for Call-n-Ride, which illustrates the adaptability of the system, and
that Call-n-Ride payments can be accepted through multiple platforms. MJ Management Services,
(MJM) provides technology services for the Call-n-Ride program. The contract in part includes
MJM's EZTransport Transportation Management System. The system processes swipe card
transactions, collects data for each transaction from the taxi companies' system, documents client
trips and stores the information in a database for the County to review.
During the transition from vouchers to swipe cards, MJM worked with the taxicab
companies and their various technology/equipment vendors including Verifone, Taxi Magic,
Square currently charges 2.75% per transaction.
9
Square provides an "instant deposit" that virtually eliminates any lag: https:!lsguareup.com/pos/payments/instant­
deposit
10
According to DOT, Call-n-Ride has 5,400 participants, of whom approximately 75% are age 67 and over. The
remaining participants are persons with disabilities between the ages of 18 and 66. The Call-n-Ride program provides
roughly 10,500 trips per month, for which participating fleets are reimbursed, in aggregate, about $200,000 per month.
Fleets required to participate in the program are Barwood, Regency, Action, and Sun.
11
Existing regulations for participation in County user-side subsidy programs are at COMCOR 53.223.01 through 03
(see ©31).
8
5
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Wireless Edge, and IT Curves, to integrate their Mobile Data Terminal's (MDT) hardware and
software to ensure that they have compatible equipment in their vehicles. The vendors received
the Application Program Interface (API) which basically details how the various software
components should interact; as well as the integration protocols, routines and specifications for
processing and sending transactions/accompanying data to the MJM system. The Taxicab
companies then worked with their technology vendors to incorporate the tools necessary to ensure
that their system can provide ongoing system processing capabilities, required to participate in the
Call-n-Ride program. Prior to the program launch, DOT conducted successful tests of all the
companies' hardware and software equipment, mobile
data
computers, taxi meters, swipe card
terminals, global positioning system devices and manual card printers.
If
drivers begin using their own processing systems to process credit card transactions, this
sort of relationship would likely evolve in one of several ways:
(1)
a subscription system where
the provider is compensated directly by the fleet or association, with the fleet or association then
passing that cost on to the driver in the lease, or as an additional charge approved by the Director
12;
(2) a system whereby the hardware is purchased with the cost included in the lease; or (3) the
County might identify and contract with a provider, and include the cost of the equipment in the
annual fee required for the PVL or, possibly, the Driver Identification Card. In any event, this
shift will almost certainly result in an increase in upfront expenses for drivers to cover the costs
where such a new arrangement is required.
Cornerstone Montgomery concerns:
As mentioned above, the Council received a letter from Cornerstone Montgomery
expressing concern that the Bill would negatively impact their 'Road to Independence'
transportation assistance program. The concern is rooted in the provisions ofthe Bill which would
facilitate drivers using their own credit card processing devices/systems. The program in question
is a partnership between Cornerstone and Barwood, and uses gift cards that "are swiped through
the payment terminals just like a credit card." Cornerstone believes that drivers using their own
systems would not allow them to track the transactions of participants. Because Barwood supplies
Cornerstone with the information used to track the transactions directly from the processing
systems in the taxicabs, Cornerstone's concern could be valid, if Barwood (or Verifone) removes
the machines from the taxicabs as described above.
As a technical matter, the concerns raised by Cornerstone in its letter exist under the current
law. The law already allows drivers to use their own processing devices, but requires that they be
capable of accepting Call-n-Ride payments. Bill 53-15 merely shifts the Call-n-Ride requirement
from the system to the vehicle. DOT Director Roshdieh has suggested that the program may be
processed using Call-n-Ride payment technology.
Customer service concerns:
Barwood has raised concerns related to customer service problems when drivers use their
own credit card processing systems. When a driver uses such a system, and a customer has a
problem with the transaction, that customer will likely contact the fleet. The fleet, which in these
Ibik, in his letter to Acting Director Roshdieh, proposed that drivers would pay the cost ofthe equipment through
a payment of 1% per transaction paid
to
the fleet. This proposal is problematic in that it would still require the fleet
to assume the risk that such payments may not cover the cost ofthe equipment, leaving the fleet to cover any shortfall.
6
12
Mr.
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circumstances would have no control over the payment, would not be able to directly assist the
customer in resolving the conflict, beyond referring the customer to the driver or attempting to
mediate the dispute. Barwood has supplied a list of complaints related to drivers using systems
such as Square that it has received since October 2015. These complaints range from concern
about the use of such a system (which is currently illegal, as none has been approved by the
Department), to failure to receive a receipt (which is also illegal, under Section 53-313(a)), to
overcharging of fares.
A fleet could also direct the customer to initiate a payment dispute with the customer's
credit card, which would then trigger (at least in Square's case) an existing dispute resolution
procedure.
13
However, a shift to drivers using their own credit card processing systems could
increase customer service costs for the fleet, and
it
would likely be the fleet that a customer would
hold at least partially responsible for the wholly independent actions of its drivers. However, this
perceived responsibility is not limited to payment problems, but would be the case for any sort of
bad behavior by drivers.
Consumer protection concerns:
Questions have also been raised about whether allowing drivers to use devices such as
Square would present consumer protection problems, due to a perceived lack of security of
transactions on such devices. As a preliminary matter, it is worth noting that these devices are
frequently used by merchants at farmers markets, festivals, and other non-fixed location venues
without any regulatory oversight other than the federal banking laws. They are also used, legally,
by taxicab drivers in many jurisdictions locally and nationwide.
14
Also, the law as amended by
this Bill would still require DOT approval of any processing system, and could require registration
of that system with DOT. Presumably, such an approval would take into account the security of
the system.
Staff contacted the Office of Consumer Protection (OCP), and was informed that, to date,
OCP has not received a single complaint regarding
any sort of merchant
related to a mobile
processing device such as Square. Square devices adhere to Payment Card Industry Data Security
Standards (PCI-DSS),I5 and use data encryption and other security features. I6 Staff believes that
many of the security issues related to processing credit card transactions are due not to the device
used to process the transaction, but rather to the vulnerabilities ofusing the outdated magnetic strip
technology on the cards themselves.
17
As U.S. banks, consumers, and merchants transition to the
use of EMV chip technoiogyI8 (which all merchants are required to accept as of October 2015),
these vulnerabilities will disappear. Square offers an EMV-compatible card reader.
19
Ultimately, consumers using credit cards for payment have a strong ally in their credit card
companies. Consumers are not liable for fraudulent charges over $50, and credit card companies
https://squareup.com/help/us/enJarticie/3882-resolving-paymellt-disputes
14
Taxicab drivers are allowed to use their own credit card processing systems in San Francisco, Seattle, Denver, St.
Louis,
15
PCI-DSS are security standards developed by the PCI Security Standards Council. For more information, see:
h.UQ
:!!www·PS_W...9r\d.cQITljat1jcie!20493
20L,.i:1i.P..~~f9..r.:~!l~.Y::l2f.i~Qmp"1
iang.hUn!.
16
https:i/squareup.com/security
17
http://monev.bowstuffworks.comfpersonal-finance!on Iine-banking/mobile-credit-card-readers-secure. htm
18
http://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php
19
https:tlsquareup.com!emv
13
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will typically resolve a customers' complaint about a billing error or overcharge, if the customer
is unable to resolve it with the merchant. Thus, disputing a charge through the card company is
generally available as a means for a consumer to resolve a charge problem.2o
Recommendation:
As mentioned above, DOT requested that the requirement that each taxicab be equipped to
accept Call-n-Ride payments be clearly addressed in the law. While it is still unclear what the cost
of requiring compliance while decoupling credit card transactions from Call-n-Ride would be,
such cost should be borne by each driver as an independent contractor. With this consideration in
mind, staff recommended Committee approval of the Bill with the following amendment.
Committee recommendation (3-0):
Add the following language immediately after line 22:
53-222. User-side subsidy programs - participation.
tru.
ill
Any fleet or association must participate m the County's user-side subsidy
programs, as required by applicable regulations; and
each taxicab affiliated with, or operating under
~
license issued
~ ~
fleet or
association that is required to participate in
~
County's user-side subsidy program
must be equipped to accept payment through the program.
*
*
*
Correspondence since the February 4 T &E Committee
On February 26, Council Staff received a letter from Dwight Kines, Vice-President of
Transdev on Demand (Sun) (©32), which included several requested amendments to the Bill that
were also requested by Barwood (©33). The requested amendments are framed as "consumer
protection" measures, and are summarized, with staff comments, below:
1. Retain the cap of
5%
on all credit card charges,
as in the Committee-recommended Bill.
2. Require a driver to accept a credit card payment.
It
has not been alleged that refusal to
accept credit card payments is a problem in the County, but this sort of provision is
common in other jurisdictions, and is a good way to ensure that it does not become a
problem.
3. Require a driver to allow a passenger to use any available credit card processing
equipment (such as that provided by the fleet).
This is would allow a customer to choose
the method of paying by credit card, if multiple systems are available. San Francisco is an
example of a jurisdiction that allows drivers to use their own systems, but requires drivers
to allow passengers to choose from any available means of payment (see ©34).
4. Require a driver to make each credit card passenger aware ofall payment options.
Related
to the reservation of customer choice, this would place a duty to inform on the driver. This
could be unwieldy in practice, and fleets could arguably achieve this by posting such
information inside the taxicabs.
20
A detailed description of the process for the resolution of billing disputes can be found at:
http://www.creditinfocenter.com/cards/crbilling.shtmJ
8
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5. Require a driver to give a passenger a "printed or electronic" receipt "immediately at the
end ofeach trip.
"
Existing law requires a receipt (see ©2, lines 13-16); this would clarify
that the receipt could be electronic. Under existing law, an electronic receipt could be
given provided it was "a form authorized by the Department," but staff agrees that clearly
stating that is advisable. Also, this requested change would require that the receipt be given
immediately, which may be problematic with electronic receipts, given occasional delays
in email messages, and the lack of control over the delivery on the part of the driver.
6. Retain the requirement in the existing law that any approved system be capable of
accepting Call-n-Ride payments.
This requested change would effectively nullify the
second purpose ofthe Bill: to facilitate drivers' use ofthe processing system oftheir choice.
It
would essentially eliminate that possibility until other systems such as Square become
capable of accepting these payments.
7. Require any approved system to be compliant with PCl standards.
Again, San Francisco
has a similar requirement, albeit with slightly different language.
It
is worth noting that San
Francisco does not require any sort regulatory approval of systems used by drivers, as this
Bill does, and that such approval would likely include a determination ofconformance with
PCI standards.
8. Require a driver to provide to a passenger paying by credit card on a system other than
that provided by the fleet:
(1)
contact informationfor the driver;
(2)
information generally
disclaiming any responsibility on the part of the fleet for credit card payments on the
system; and
(3)
information aboutfiling a complaint with the County's Office ofConsumer
Protection.
As with request number (4), above, much of this information may be provided
by the fleet in the form of a permanent posting inside the taxicab. Also, under existing law,
the taxicab driver identification card is required to be conspicuously displayed in the
taxicab, "plainly visible to passengers."
This packet contains:
Expedited Bill 53-15
Legislative Request Report
Fiscal and Economic Impact Statement
Public Hearing Testimony
AI Roshdieh
Lee Barnes
Beth Levie
Barwood credit card costs chart
Letter from Cornerstone Montgomery, February 3, 2016
"Barwood Driver Income: AFL-CIO Assumptions vs. Actual Data"
Drivers' Post-mediation Position Statement (abridged)
Barwood message to drivers
Councilmembers' memo to Al Roshdieh, October 23, 2015
MCPDU letter to Al Roshdieh, November 12,2015
DOT response to October 23 letter, January 15,2016
County Attorney Bill Review Memorandum, January 5, 2016
COMCOR 53.223.01
Kines letter dated February 25,2016
BarwoodlSun requested amendments
San Francisco Transportation Code
§
1124
F:\LAW\BILLS\I553 Taxicabs - Credit Card Transactions\Action Memo.Docx
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Expedited Bill No. ""53=:..--'-'15=:..----:-_-:---::--:
Concerning: Taxicabs - Credit Card
Transactions
Revised:
2/26/16
Draft No. 2
Introduced:
December 8, 2015
Expires:
June 8, 2017
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: --'-'!No!:!!n.!!:e:..-_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Councilmembers EIrich, Riemer and Navarro
AN EXPEDITED ACT
to:
(1)
limit the amount a licensee may charge a driver or affiliate for processing a
credit card transaction;
(2)
amend the requirements for credit card processing systems in taxicabs; and
(3)
generally amend County law concerning taxicabs,
By amending
Montgomery County Code
Chapter 53, Taxicabs
Sections 53-218 and 53-313
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unqffected by bill.
The County Council for Montgomery County, Maryland approves thefollowing Act:
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ExPEDITED BILL
No.
53-15
1
2
Sec 1. Sections 53-218 and 53-313 are amended as follows:
53-218. Responsibility of licensees, affiliates, and drivers.
3
4
*
*
*
(t)
A licensee must not impose on a driver or affiliate:
(1)
[[a charge of]] charges totaling more than [1% over bank,
merchant services and equipment provider] [[the fees paid by
the licensee [on] for processing any credit card transaction)) 5%
of any credit card transaction; or
5
6
7
8
9
10
11
(2)
any other charge of a type or amount other than those on the list
adopted by regulation under Section
53-Ill.
*
(
a)
*
*
12
13
14
15
16
17
18
19
53-313. Passenger receipts; credit card transactions.
A
driver must give each passenger a receipt showing the name ofthe fleet
or association, the taxicab number, the time and place of origin and
destination of each trip, and the amount of the fare, on a form authorized
by the Department, unless the passenger declines to receive the receipt.
(b)
Any system or service used to process credit card transactions must:
(1)
be compliant with all applicable tax laws; and
(2)
[accept payment through any County user-side subsidy program;
20
21
22
23
and
(3)]
be approved by the Director.
*
*
*
53-222. User-side subsidy programs - participation.
24
25
26
ill
Any fleet or association must participate in the County's user-side
subsidy programs, as required by applicable
regulations~
and
(Q)
Each taxicab affiliated with, or operating under
~
license issued
!Q"
~
fleet or association that is required to participate in
~
County's user-side
27
@
f:\law\bills\1553 taxicabs - credtt card transactions\bill2.docx
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ExPEDITED BILL
No. 53-15
28
subsidy program must be equipped to accept payment through the
program.
29
30
31
32
33
34
*
*
*
Sec. 2. Expedited Effective Date.
The Council declares that this legislation
is necessary for the immediate protection ofthe public interest. This Act takes effect
on the date when it becomes law.
Approved:
35
36
Nancy Floreen, President, County Council
Date
37
Approved:
38
Isiah Leggett, County Executive
Date
39
This is a correct copy o/Council action.
40
Linda M. Lauer, Clerk of the Council
Date
o
f:\Iaw\bills\1553 taxicabs - credit card transactions\bill2.docx
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LEGISLATIVE REQUEST REPORT
Expedited Bill 53-15
Taxicabs
-
Credit Card Transactions
DESCRIPTION:
Expedited Bill 53-15 would refme existing provisions of the law
related to processing credit card payments for taxicab service. These
provisions were added to the law by Expedited Bi1153-14, which was
enacted earlier this year and substantially revised Chapter 53.
Specifically, the Bill will prohibit licensees from charging drivers
and affiliates more than the actual cost to the licensee for processing
a credit card transaction, and will make it easier for drivers to use
their own credit card processing systems.
Some PVL licensees continue to charge drivers and affiliates
substantial fees for processing credit card transactions.
Ensure that taxicab drivers and affiliates are able to reliably process
credit card transactions at the lowest cost.
MCDOT
To
be
requested.
To
be
requested.
To be requested.
To be researched.
Josh Hamlin, Legislative Attorney
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
N/A
f:\Iaw\bills\1553 taxicabs - credit card transactions\lrr.doc
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ROCKVILLE,
~MARYLAND
MEMORANDUM
JanWll)'
15,2016
TO:
Nancy
Floreen~
President, County Counci
FROM:
~
Jenniter A. Hughes, Director,
Office.
ofM
Joseph
F.
Beach.
Director, Department of.
c~~~,
ent
an~.d 9~
get
u
SUBJECT:
FEIS for Bm 53-15E, Taxicabs - Credit Card
Transac~
~
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JARfz
cc: Bonnie Kirkland, Assistant Chief Administrative Officer
Lisa
Austin,
Offices
of
the
County
Executive
Joy Nurmi, Special Assistant to the County Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach. Director> Department of Finance
Al Roshdieh, Acting Director, Department ofTtansportation
D~id
Platt. Department ofFinance
Brady Goldsmith, Office of Management and Budget
Alex Espinosa, Office of Management and Budget
Naeem
Mia.
Office of Management and Budget
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Fiscal Impact Statement
Expedited Bill 53-15, Taxicabs - Credit Card Transactions
1.
Legislative
Summary.
This bill will limit
taxi
cab fleet owners from charging drivers more than. what they are
charged by banks
for credit card processing
2.
An
estimate of changes in County revenues and expendiu,u-es regardles$ of whether the
revenues or expenditures
are
assumed in
the
recommended
or
approved budget. Includes
source
ofinformation,
assumptions. and
methodologies used.
None
3.
Revenue and expenditure estimates covering
at least
the
next 6 fiscal years.
None
4.
An
actu(Ui!UanaJysls through the entire amortization period
f9r~~bUt~;~:oWd
affect
retiree pension or group insurance costs.
N.A.
5.
An
estimate ofexpenditures related to County's infonnation technology (IT)
systems,
including Enterprise Resource Planning
(ERP)
systems.
None
6.
Later actions
that
may affect future revenue and expenditures
if
the bill authorizes future
spending.
None
7. An estimate of the staff time needed to implement the bill.
None
8.
An
explanation of how the addition of new staff responsibilities would affect other duties.
No
new staff responsibilities
9.
An
estimate of costs when an additional appropriation is needed.
None
10. A description ofany variable that could affect revenue and cost estimates.
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None
11. Ranges of revenue or expenditures
that
are uncertain or difficult
to
pr~ject.
None
12. If a bill
is
likely to have no fiscal impact, why that is the case.
. This is an amendment to an already existing law and is meant to give taxi drivers more
pr6tection from what the fleet owners can charge them. No funds pass through the County.
13. Other fiscal impacts or comments.
None
14. The following contributed to and concurred with this analysis: Anthony AleXiou, DOT
(j)
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Economic
Impact
Statement
Bill 53-1SE, Taxicabs - Credit Card
Transactions
Background:
This legislation would limit the amount a licensee may charge a driver or affiliate for
processing a credit card transaction and amend the requirements for credit card
processing systems
in
taxicabs.
Bill
53-1SE
amends Section 53-218 of the
County
Code
such that a licensee
may
not impose on a driver or affiliate a charge of more than the fees
paid
by
the licensee
for processing any
credit card transaction..
1.
The sources of information, assumptions, and methodologies used.
The source ofinfonnation is the Montgomery
County
Department of Transportation
(DOT). There are no assumptions or methodologies used
in
the preparation ofthe
economic impact statement. The reduction in the charges that a.
licensee
receives
tor
processing a credit card transaction is offset
by
the decrease in the
driver~s
cost to
operate the taxicab. Therefore, there is a revenue loss
to
the licensee but an equal
gain to the drivt.'f because ofthe reduced fee.
2. A
deseription
of
any variable
that
could
affect
the
economic
impact
estimates.
There are no variables that could affect the economic impact estimates. \Vhile there
is a negative economic impact on the licensee, the impact is directly offset
by
a
positive economic impact on the
driver~
3. The Bill's positive or negative effect,
if
any on employment, spending, savings,
investment, incomes, and property values in the Connty.
Bill 53-15E
would
have no economic impact on employment, spending, savings,
investment, incomes, and property values in the County. It is a zero sum economic
impact - one agent gains a benefit (reduced transaction cost) while the other agent
losses a benefit (redueed transaction fee).
4.
If
a Bill is likely
to
have no economic impact,
why
is
that
the
~ase?
Please see paragraph #3.
5.
The
following contributed to or concurred with this
analysis~
David
Platt
and
Rob
Hagedoom, Department Finance; Tony Alexiou, Department of Transportation.
~
1
/f
'$
/I.J.:-k _ _
Page I of 1
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Testimony of County Executive Isiah Leggett
Bill 53-15
January 19,2016
Good afternoon Council President Floreen and Council Members. My name is AI Roshdieh and
I
am the Acting Director for the Montgomery County Department of Transportation. I am here
today testifying on behalf of County Executive Isiah Leggett regarding Bill 53-15 and its
proposed amendments to Sections 53-218 and 53-313 of the County Code.
The County Executive does not object to this bill. He is concerned, however, about the
unintended consequences of this bill for the County's seniors and disabled residents who rely on
Call-N-Ride for their transportation needs.
Expedited Bi1l53-15 amends the County Code to preclude taxicab companies from imposing
upon drivers any charges in excess of the fees paid by the taxicab companies for processing
credit card transactions. This part ofthe law is clear, but the Department needs the ability to
verify that the companies are in compliance with the law. At the very least, we request that the
bill be amended to include a requirement that the companies certify to the Department that they
are not adding additional processing fees over and above what they are paying.
The Bill also repeals the current requirement that every system used in a taxicab to process credit
card transactions also be able to process payments for the County's "Call-N-Ride" program. The
Call-N-Ride program offers subsidies to low-income persons who are elderly or have disabilities
and need transportation for medical appointments. The Call-N-Ride program only processes
subsidy payments through electro,nic means because the previous paper voucher system was
susceptible to fraud and abuse.
In
order to avoid disruptions in service to those who are eligible
for and heavily rely on the Call-N-Ride program, the Bill should be amended to require that a
system be in place to process Call-N-Ride payments.
Thank you for the opportunity to express the Executive's views on this Bill. My staff and I look
forward to further discussing these points in greater detail during the T&E Committee session in
February.
(j)
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BARWOOD
Testimony of Lee Barnes
EXPEDITED BILL 53-15, TAXICABS-CREDIT CARD TRANSACTIONS
*
January 19, 2016
Good afternoon Madam President and Council members. I'm Lee Barnes, President of
Barwood Transportation. Thank you for allowing me to express my concerns with Bill
53-15 and to respectfully ask that you vote against this legislation.
53-15 raises more questions than it answers. It reflects an oversimplified perception of
how credit card transactions are processed. It calls into question the continuance of
Call-N-Ride. It oversteps the authority given to the newly created Taxicab Commission
and places an even greater burden on locally regulated taxi service.
First, the bill adds the term "processing" to Chapter 53, as it relates to credit card fees.
But what exactly does processing mean? The law that went into effect less than four
months ago referred to "bank, merchant services and equipment provider fees." 53-15
replaces that language with "processing" yet provides no definition of the word.
The most important thing to understand is this: The fee charged by a financial institution
is just one of the many costs taxicab companies incur when customers pay by credit
card. We also pay fees for the credit card terminals, as well as for the secure software
used to process the transaction and collect the data required by County and federal law.
DRIVEN FOR EXCELLENCE
1
4900
NichoLson Court, Kensington, MaryLand
20895. 301.984.8294. 800.521.9077
http://www.barwoodtaxi.com
~
\;-J.....
r
...
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The second question relates to the unintended consequence that 53-15 will have on
providing Call-N-Ride services. The bill eliminates the requirement that a credit card
system accept payment for County subsidized services. Many drivers are now using
technology such as Square to take customer payments, even thollgh this method has
not been approved by DOT. If this is the direction the Council wishes to take, Barwood
will no longer be able to maintain the safer and more secure credit card equipment
currently in the back seats of our taxis.
Here's why: First of all, while popular with some drivers, technology such as Square
doesn't allow for processing County-subsidized services. If we are only to use our
equipment for processing Call-N-Ride - which does not generate revenue for taxi
companies - we will not be able to fulfill our revenue obligation with the equipment
provider. They will remove their equipment, leaving the County with no way to process
Call-N-Ride services. Surely that is not the Council's intention.
Third, Bill 53-15 calls into question the purpose of the Taxicab Commission. Just last
year the Council created a Taxicab Commission to examine issues such as this and
provide recommendations. I ask that the Council give the Commission the opportunity to
do its work before considering more new laws that hurt the taxicab industry and could
negatively impact County services.
I am more than willing to sit down with each member of the Council to discuss the
breakdown of our credit card transaction costs and what is actually charged to the driver
so the Council can make an informed decision on Council Bill 53-15.
Thank you for your consideration.
2
DRIVEN
FOR
EXCELLENCE
4900 Nicholson Court, Kensington, Maryland 20895. 301.984.8294. 800.521.9077
http://www.barwoodtaxi.com
'.t..,...
::-;>.
"-.-/
LI_"_.
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Beth Levie, 9402 Russell Rd Silver Spring 20910, blevie@aftcio.org 202 285-3667
My name is Beth Levie. I work for the National AFL-CIO and live in
Montgomery County. I am testifying in favor of expedited Bill 53-15. In
recent years, the AFL-CIO has been working to help organize hundreds of
thousands of workers in this Country that are classified as independent
contractors. These workers have no legal right under US law to earn
minimum wage; are not covered by workers' compensation, overtime rules
or other workplace protections; and do not receive social security or
unemployment benefits. One of the ways these workers gain protections is
through legislation such as the legislation that was signed into law this
summer. We thank the council for voting 9-0 for reforms that will regulate
the taxi industry through uniforms leases and caps on rent and other fees,
and a fair dispute resolution system.
Lowering the credit card rates have always been central to the drivers'
struggle. Why, because more customers want to use their credit cards;
accepting payment is mandated by County law; and a company with a high
credit card ran can decrease a driver's income by 10% or much more.
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For example a driver works 338 days and takes in $82,000 in fares and
$4453 in tips together its $86,453.00. Drivers estimate that currently 70% of
all fares paid with credit cards. In our example, that would be $60,517.
Barwood charges drivers 7.45% which would be $4,508 credit card costs to a
driver. When you take rent in to consideration -- $33,000 - and the cost of gas
- about $14,000 -- the driver is left with $39,453. Subtract $4508 in credit
card charges and now he is taking home $34,945. That's 13%; not
considering other fees and other expenses which would make the credit card
expense an even larger portion of his take home income.
It
looks even worse for a driver what takes in only $54,000 in fares and
tips. Using the 70% estimate, that means $37,800 of his fares and tips via
credit card, yielding $2,816 credit card charges. Mter subtracting $33,000 in
rent, $10,000 for gas, and $2816 in credit card fees, the drivers is left with
$8,184. His credit card fees would represent 31 % of his earnings.
The County can do something about this and bring fees charged to
drivers in line with other merchants' fees for credit card use. Please pass
legislation that works to lower credit card cost to drivers.
@
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2014 Credit Card Processing Costs Passed on to
Drivers as
%
of Total Credit Card Revenue
9
10
11
8
0.22% 0.01%
0.03%
0.01%_ ..,
1:':'::----­
I
2014 Vendor Credit Card Processing Charges Passed on to Drivers
1
2
3
4
5
VeriFone Transaction Fees
(#
of transactions
Vendor Fees
Charged to
I
BalWood
$ 0.25
I
Shown in Pie Chart:
Annual Credit Card
Fees as % of 2014
Credit Card Revenue
0.94%
0.14%
1.95%
1.08%
1.18%
0.07%
*
fee)
VeriFone Basis Points per Transaction
(total credit card revenue" fee)
VeriFone Processing Fee for Visa, MasterCard, Discovery
(revenue *fee)
American Express Processing Fee
(revenue" fee)
VeriFone/Verizon Airtime Fee
(#
of cars
0.15%
2.85%
4.33%
$ 25.00
$650.00
*
fee)
(monthly flat fee)
6
I
Web Service and Credit Card Gateway VPN
7
8
9
VeriFone Call-N-Ride Transaction Fees - Preauthorization
&
Sales
(#
ofswipes
*
fee
-
County requires an additional card swipe before trip starts)
I
$
$
1.50
0.75
-
I
2.16%
0.01%
Gift Card Per Transaction Fees
(number of gift cards used" fee)
Credit Card Account Billing for Executive and Institution Accounts
(revenue
*
fee)
Charge Anywhere Monthly Fee
I
3.35%
$140.00
$ 24.00
0.22%
0.01%
0.03%
10
(applies
to a
passenger fare paid by another party)
11
IRN Fee for account reconciliation
(monthly fee)
TOTAL 2014 CREDIT CARD PROCESSING FEES PASSED ON TO DRIVERS AS %
OF CREDIT CARD REVENUE
7.770/0
Barwood Taxi February 3, 2016
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~.
Cornerstone
Montgomery
February 3, 2016
Dear Council President Floreen,
I a m writing to you today on behalf of Cornerstone Montgomery and our partners to express concern about Expedited
Bill 53-15, Credit Card Transactions. We are concerned that this legislation will negatively impact our recently expanded
'Road to Independence' transportation assistance program.
The Road to Independence initiative began as a public private partnership between our organization, The Rotary Club of
North Bethesda and Barwood Taxi. This program provides taxi service to disabled individuals in Montgomery County to
places of employment at hours when and in locations where public transportation systems are not operating.
A key component of the program is our partnership with Barwood Taxi. Our program participants receive a reloadable
Barwood travel vouchers with a fixed dollar amount to cover their transportation costs. The gift cards are swiped
through the payment terminals just like a credit card. Using the secure payment terminal is essential as it allows us to
keep track of each transaction and generate the reports necessary to audit the success of our efforts.
Cornerstone Montgomery recently received a grant from the Montgomery County Council that is helping to expand our
funding base and allow us to serve more individuals with disabilities through partnerships with the following charities:
Luke's Wings, Peer Wellness and Recovery Services, Inc., Family Services, The Treatment and Learning Center, Easter
Seals and Interfaith Works.
Bill 53-15 proposes to amend the requirements for credit processing systems, allowing drivers to use a system of their
choosing. Our concern is that this will inhibit use of the travel vouchers we rely on as well as our ability to access what is
now a new County supported program. We will be unable to track the transactions of our program participants and we
will lose the data needed to evaluate the program.
The grant we received demonstrates that the Council recognizes the need for unique transportation assistance programs
like ours. There is a need in the County for subsidized transportation assistance and our program brings together the
business and nonprofit sectors of the County to address that need. It would be unfortunate to jeopardize a valuable
community initiative in its infancy.
We urge the Council to weigh the potential unintended consequences of Bill 53-15. Limiting the ability of taxicab
companies to process County subsidized trips would jeopardize the operations of our program and any future efforts to
attract additional partners.
Sincerely,
Uv1A.r·~~Cho
Cari Guthrie Cho, LCSW-C
President
&
CEO
6040 Southport Drivt':'
I
ScthQsd", MO
20B14
f
www~cornerstonemont90mery.or9
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BARWOOD DRIVER INCOME: AFL-CIO ASSUMPTIONS VS. ACTUAL DATA
1/27/16
Assumptions
AFl-CIO
Actual
Actual
Hypothetical Driver
$82,000 Annual Revenue $82,083 Annual Revenue $69,224 Annual Revenue
Annual Days Worked (Meter Days)
Fares Collected
Tips Received
(by
credit card does not include cash tips)
Total Driver Revenue (less cash tips)
Percentage of Fares Collected by Credit Card Transaction
Gas (see
*
and
**)
Lease Fees or Rent
Estimated Credit Card Charges
Net Earnings
Barwaod Driver
2014
Average Barwood Driver
2014
338
$82,000.00
$4,553.00
$86,000.00
70.00%
-$14,000.00
-$33,000.00
-$4,500.00
$34,000.00
331
$82,083.00
$4,454.00
$86,537.00
38.87%
-$6,315.80
-$24,500.00
-$2,536.21
$53,184.99
320
$69,224.00
$4,047.00
$73,271.00
43.00%
-$6,315.80
-$24,500.00
-$2,366.42
$40,088.78
---------------------­
AFL-CIO Assumption: Assumption of gas cost of $14,000/$2.00 per gallon
driven 133,000 miles in one year.
*
=
7,000 gallons used.
At
MPG of
19,
this means the driver would have
**
Barwood Data: Drivers average 60,000 miles per year, divided by
19
miles per gallon
=
3160 gallons x
$2.00
=
$6,315.80
CONFIDENTIAL
&
PROPRIETARY
®
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SHERMAN. DUNN, COHEN. LEIFER&YELLlG. P.C.
Hon. John M. Glynn
November 13, 2014
Page 3
Standard Lease Cap Rates. An Owner of a Taxicab can charge a lease rate to a
Driver that is not greater than the following Standard Lease Caps:
$105, for all 12-hour day shifts
$115, for the 12-hour night shift on Sunday, Monday and Tuesday
$120, for the 12-hour night shift on Wednesday
$129, for the 12-hour night shifts on Thursday. Friday and Saturday
$630, for anyone-week day shift for one week or longer
$737 for anyone week night shift for one week or longer.
_7
....
2.
Drivers should be able
to
determine their own means to accept credit cards,
and a 5% maximum charge to drivers should be imposed where a company's
terminal is used
As you know, the majority of cab drivers in Montgomery County are forced to
pay exorbitant fees to process credit card transactions. Those fees can range from
5% to as high as 7.9% (8.5% in some instances) for Barwood drivers. Your report
should recommend that the County set certain standards that must be met and
allow drivers the freedom to choose a credit card terminal that best fits their needs.
If, however, the drivers are forced to use company terminals, then the county should
set the maximum credit card fee at 5%. That type of system is consistent with those
in surrounding jurisdictions.
For example, in Alexandria, Section 9·12-32(t)(1) of the Alexandria Virginia
Taxi Ordinance mandates a 5% maximum percentage credit card fee if a certificate
holder mandates that its affiliated drivers use a specific credit card processor.
It
is important to remember that each driver in Montgomery County
is
treated as an independent contractor. Although the drivers understand the
County's need to mandate that credit cards be an acceptable form of payment, as
independent contractors, the drivers should be the ones to determine how best to
meet such a mandate.
It
is the drivers, and not the fleet companies, who depend
upon the customers' fare to run their business. The City of San Francisco has
recognized this very basic idea.
Section 1124.(d)(1) of the San Francisco
Transportation Code stipulates that a driver has the right to choose a credit card
payment processing merchant account service so long as it conforms to the
standards placed by the city. No fleet company. under the San Francisco Code, may
retaliate against a driver for electing, or not electing,
to
establish his or her own
credit card processing account.
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View as a webpage
Page 1 of3
BARWOOD
TAXI SERVICE
Follow Us:
'*
301.984.1900
Dear Valued Driver,
On Tuesday, July, 21, 2015 Expedited Bill 53-14 was signed
into law. There have been many rumors about these
changes. This communication will separate the myth from
the facts.
What You Need to Know
Effective Date of the changes:
There are several changes but they are effective at
different times. Changes are either:
• Effective upon approval by the Director of
Montgomery County's Department of Transportation.
• Effective October 1st, 2015
More individuals can own PVLs
PVL ownership is no longer restricted to only 20% for
individuals. The County will issue new PVLs over the next
six months.
However, NEW PVLs are not transferable, meaning
they can NEVER BE SOLD.
If you get a new PVL from the County you can't sell it, will
it to your children or spouse, you can only run it as a taxi.
Existing PVLs will be grandfathered in, meaning IF you
currently own a PVL or buy a PVL that was first issued
before January 1st, 2015 then you are allowed to sell
that
PVL for its value.
So now is a good time to own a PVL that still has value! We
have a list of available PVLs. If you're interested in owning,
email ptp@barwoodinc.com or call Vanessa Curtin 240-514­
1232.
PVL Leasing
The County is currently designing regulations for leasing a
PVL. They expect to be finished with these regulations in
approximately 3 months. Therefore you will have to wait 3
months or longer to lease a PVL. As soon as we have more
information, we will let you know.
However, keep in mind there are more advantages to
owning a PVL.
Card Swipe Devices
@
htt
:lIcam
ai n.r20.constantcontact.comlrender?ca=cd767d78-402b-47cl-afc6-148ea453a3... 2/1/2016
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View as a webpage
Page 2 of3
There has been a lot of misinformation about the use
of card swipe devices, such as Square. Here are the
facts:
• All
devices MUST be approved by Montgomery
County's Director of Transportation
• All
devices MUST be able to integrate with the fleet
dispatch system and must integrate with and accept
user side-subsidy programs like, Call N Ride
• Per Chapter 53 Code section 53-313. Any system or
service used to process credit card transactions MUST
meet these requirements.
• It
is a violation of Chapter 53-313 to use non­
approved swipe devices.
Fees
There is NO change to current lease rates. There are
rumors that lease rates were lowered by the County. This is
NOT true.
The Department of Transportation will set a
maximum
lease
rate but as a private business, each fleet and affiliate owner
will individually decide what they charge to lease their
vehicles. This will be based on their brand
l
dispatch and
costs.
Credit Card Fees
Barwood's Technology Marketing and Service Fee (TMSF)
covers all equipment provider costs, such as bank merchant
fees, credit card charge-back fees, transaction fees and air
time fees, plus all fees for Call N Ride processing.
Per Chapter 53-218, we are allowed to collect for all of
these fees plus 1
%.
Over the last month we have been testing new software in
an effort to bring down the costs. Unfortunately, this has
also stopped our direct deposit ACH process.
We were successful in bringing the cost down somewhat.
So, effective later this week our TMSF fee of 7.95% will
change to 7.45% We will no longer charge our own .50%.
However it will require the distribution of manual checks for
a bit longer.
We fought for other changes that would be very positive for
d rivers, like dynamic fare pricing, when customers use our
taxi app. This would allow surge pricing similar to TNCs, like
Uber and Lyft and drivers could make more money.
However, some drivers fought this fare flexibility and the
dynamic pricing model was voted down.
This is the first in many communications in regards to these
changes. Future communications will discuss:
• Our new taxi booking app
• Positive changes to our dispatch system
• A new marketing team and plan to get more fares
• New driver incentive plans
http://campaign.r20.constantcontact.com/render?ca=cd767d78-402b-47cl-afc6-148ea453a3...
2/112016
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MONTGOMERY COUNTY COUNCIL
ROCKVILLE. MARYLAND
October 23, 201 5
Mr. AI Roshdieh, Acting Director
Montgomery County Department ofTransportation
lot
Monroe Street,
IOIB
Floor
Rockville, Maryland 20850
Dear Mr. Roshdieh:
Earlier this year. the County Council passed, and the County Executive signed, Bill 53-14 to regulate the
taxicab industry. We appreciate the work that is being done in your department
to
enact the new
requirements ofthe law-and
to
that end, we wanted
to
make you aware of several concerns we have
regarding the recovery of costs associated with credit cards.
As enacted, Section 53-218 of Bill 53-14 contains the following provision:
A licensee must not impose on a driver or affiliate:
(1) a charge ofmore Ihan
J
%
over bank, merchant services and equipment provider
fees paid
by
the licensee on any credit card fransaction; or
(2) any other charge ofa type or amount other than those on the lis/ adopted
by
regulalionunder Section 53-111.
It
has been brought
to
our attention that Barwood Taxi company may be circumventing this section of the
law. In a memo
to
its drivers addressing credit card fees, Barwood states it has reduced its "Technology
Marketing and Service Fee" (TMSF) from 7.95% to 7.45%. However, the company does not state the
actual costs of the credit card transaction. (t seems unlikely that the credit card companies are charging
6.45% for their services.
Further, the fees subject to the 1
%
limit must be "paid by the licensee
011
any
credit card transaction."
This means that if the licensee rents or leases equipment for a set amount, it
cannot
try
to pro-rate that
cost and pass it on as a per-transaction cost for the driver.
It
can, however, pass that cost along to drivers
as part ofthe lease or as a separate fee. We are concerned that taxi companies may
be
playing fast and
loose with the interpretation of "any credit card transaction," and may be "packaging" other expenses
alongside those pennitted by this provision.
STELLA
S. WERNER
COUNCIL
OF'F!GE:
BUILDING'
100 MARYLAND
AVENUe: • ROCKVILLE, MARYLAND
20850
240/777-7900
• TTY 240(777-7914 •
FAX
240/777-7989
WWW.MOIiITGOMERYCOUNTYMO.GOV
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Mr. AI Roshdieh
Page 2
Therefore.
we would
like you
to determine what
is
being included
in
these charges-including
the 7.45%
charge
being passed on to drivers by Barwood-so
that
we may assess whether additionallegisialion is
needed to address or clarify this issue.
Finally,
it
is our understanding that DOT requested the adopted amendment to the Bill requiring that
any
alternate card swipe device. be able to accept Call N Ride cards. We would like to know whether DOT
has
identified any sllch devices that can accept Call N Ride. If not. we'd like
to
discuss the possibility of
an interim solution to expedite approval of an alternative for drivers.
We appreciate your prompt response, as these are urgent financial issues that directly impact cab drivers
across our county daily.
Sincerely,
Sidney A. Katz
Marc Eirich
George Leventhal
Roger Berliner
~-
Tom Hucker
Nancy Navarro
Hans Riemer
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MONTGOMERY COUNTY PROFESSIONAL DRIVERS UNION
November 12,2015
Mr. Al
R.
Roshdieh, Acting Director
Montgomery County Department of Transportation
Tenth Floor
101 Monroe Street
Rockville, MD 20850
Re: The 2015 Reformed Montgomery County Taxicab Industry Regulations, Implementation
and, Enforcement
Dear
Mr.
Roshdieh,
The Montgomery County Professional Drivers Union - MCPDU, write to:
1. Ask for clarification of some sections of the County's newly reformed and passed taxicab
industry regulations.
2. Seek explanation to some disturbing and misguided interpretations of some of the sections of
the law thus far offered by your office and Barwood Taxi Company..
On July 31,2015, the County Executive signed the Expedited Bill 53-14 into law. While most elements
of the Bill have later effective dates, some aspects of it became immediately effective to give the fleet,
drivers and affiliates the much needed immediate relief on a faster timeline and earnestly begin the
process of mending the County's badly broken taxicab system.
On October 1, 2015, a number of the aspects of Bill 53-14 became effective. Amongst them are:
A.
issues with credit card as a form of fare payment;
A.
daily lease and affiliation fees capping;
A.
uniform lease agreement/contract form and;
A.
dispute resolution procedure.
Most drivers are confused with all sorts of explanation coming from your office - per your letter to Ms.
Beth Levie and, from CCTI - per Mr. Lee Barnes memo to Barwood drivers. We are aware that you,
and the council members, have read Mr. Barnes interpretation ofthe law as it pertains to his business.
We are also aware that seven of the council members feel the same way the drivers feel about his
outlandish interpretation..The seriousness of this issue for drivers cannot be understated. We pay
thousands of dollars in credit card fees. One driver, among many who paid exorbitant fees, paid $5,000
in fees last year. Per Barwood daily rent calculation formula, $5,000 divided by 312 days would be
$16.03. When this figure is added to this driver's fixed daily rent of$l11.30 on a 2010 Ford Crown
Victoria, his daily average rent would be $127.33. Could you possibly imagine what it would cost this
driver daily to operate a taxicab in Montgomery County after all other fees such as $3.00 late fee and
fuel cost are added?
Mr. Roshdieh, you are an intelligent, well-schooled and personally good-natured man but, you seem
lacking in knowledge ofthe facts of the industry.
It
is high time you took an honest and critical look at
the County's entire taxicab industry. This includes but not limited to the innate purpose of the industry
creation; the identified and potential needs of all the players in the industry; the financial versus public
@
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interests of the industry's players; the purpose and duties of the active players or executors in the
industry; the areas of success and failures of the active players; the overall health of the industry and,
most importantly, the County's residents level of satisfaction with the industry's services.
The groups of players in the industry consists of the three branches of the County Government through
their specific Departments; the County residents; the taxicab companies and the taxicab drivers. The
most active players include the DOT, the residents, the cab companies and, the drivers. With all these
interrelating bodies, the industry's problem today is well beyond the issues between the drivers and the
companies. The obvious partiality of the Executive branch and its DOT in enforcing some aspects of
the industry's regulations is the biggest single hindrance to the quality of service the drivers deliver to
the residents The drivers quest for survival urges them to do all they can do to maintain good working
relationship with the customers .but, the companies constant and senseless exploitative acts which are
often deliberately overlooked by the DOT badly inhibit the drivers efforts This favoritism seem to have
accomplished only one goal
FAILURE TO PROVIDE EFFICIENT TAXI SERVICE TO THE
COMMUNITY.
Mr.
Roshdieh, the drivers need relief and
they need it now!
We cannot wait for bureaucracy to play out
and so, we will ask you to clarify the following sections of Expedited Bill No 53-14 so we can go about
our business and actually experience the true meaning of having a process expedited:
1.
53-218: Responsibility of Licensees, Affiliates and Drivers:
A) Subsection (e)(5) states:
"not require a driver or affiliate to use fleet or association system for processing credit
card transaction ...... "
You must agree that this subsection is self-explanatory.
It
simply states that any driver or
affiliate who does not like the service fees offered by any fleet or association
DOES NOT
HAVE TO USE THE FLEET'S OR ASSOCIATION'S SYSTEM
to process credit card
transactions. If, however, our interpretation of this law is incorrect, please feel free to
explain to us what
it
is actually saying.
B) Subsection
«f)
lines 533
537) states:
" A licensee must not impose on a driver or affiliate a charge of more than 1
%
over bank, merchant
services and equipment provider fees paid by the licensee on any credit card transaction ....... "
Barwood,s interpretation of this same subsection to Barwood drivers and affiliates which was titled
"Credit Card Fees" states:
"Barwood's Technology Marketing and Service Fee (TMSF) covers all equipment provider costs,
such as bank merchant fees, credit card charge-back fees, transaction fees and air time fees, plus all
fees for Call N Ride processing. Per Chapter 53-218, we are allowed to collect for
all
of these fees
plus 1%"
We all do in fact understand that Barwood is a legitimate private business entity which has the right to
charge whatever it chooses. We all also do understand that the drivers and affiliates are legitimate
private business persons and/or entities who have the right to choose what they believe is best for their
businesses.
Barwood may have invested millions of dollars into its business and hopes to make substantial profit to
be comfortable with its operation. By the same token, the drivers and affiliates invested hundreds and
thousands of dollars and likewise hope to make adequate profit to sustain their businesses. Since none
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of the parties invested to lose, the question becomes, 'how must one invest to insure a good and steady
rate of return without tilting the balance?'
In
a market full of sellers and buyers of similar items, one
logical answer to this question would be to invest wisely so to minimize pitfalls. Another logical
answer would be for the buyers to purchase the lowest priced and equally effective item that would
serve the investment purpose.
Now, back to the true meaning of 53-218. The first two lines (533 and 534) - per Councilmember
Sidney Katz's amendment
of7/21/15
at 2:16pm clock time states, "A licensee
MUST NOT IMPOSE
on a driver or affiliate a charge of more than 1% over bank...."
Barwood's Credit Card Fee declaration states, "Barwood's Technology and Service Fee (TMSF)
covers all equipment provider costs ..... " This is way more than necessary to provide this service.
The drivers and affiliates found a cheaper way to provide the same service to their customers. This
enables them to better manage their business, make ends meet and possibly make marginal profit.
For Barwood to tell the affiliates and drivers that using their individual devices to perform credit card
transactions is a violation of Chapter 53 is unfounded and irresponsible. Barwood
MUST BE
RESTRAINED
from using falsified interpretations of the County code as a shield to protect the
owner's bad business decisions.
2.53-313: Passenger Receipts; Credit Card Transactions:
Mr.
Roshdieh, to say that we are disappointed in you and your response letter of October 15,2015
addressed to Mrs. Beth Levie in regard to the use of individual credit card processing device by drivers
and affiliates would be a gross understatement. You are supposed to be the custodian and the enforcer
of the law and, you are supposed to be fair to all and trusted by all. How could you write such a biased
letter that reads so much like something out of Mr. Lee Barnes own office?' Do you really think so little
of drivers that we cannot be responsible charging customers on devices that are used in all sectors of
the economy?
It
is very unfortunate you chose at this time to narrowly interpret the new reforms.
Nevertheless, as far as this section which formed the base of both of your letter and that of Mr. Barnes
to the drivers and affiliates goes, we offer the following. For ease of reference, we quote this same
section 53-313:
"(a) A driver must give each passenger a receipt showing the name of the fleet or association, the
time and place of origin and destination of each trip, and the amount of the fare, on a form
authorized by the Department, unless the passenger declines to receive the receipt.
(b)
Any system or service used to process credit card transaction must:
1. be compliant with
all
applicable
tax
laws
2. accept payment through any County user-side subsidy; and
3. be approved by the Director".
Mr. Roshdieh, 53-313 clearly relates to fleets' and! or associations' existing and already approved
operating systems. As indicated by these statements:
"A driver must give each passenger
a receipt showing the name of the fleet or association
on a form
authorized by the Department.. .." and
"Any system or service
used to process credit card transaction must accept payment through any
County user-side subsidy program ....."
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The fact that drivers are required in this section to give receipts to passengers who may need to have
receipts is simply because:
1. the drivers are the closest "representatives" of the fleet or association to the passengers;
2. the drivers are the ones who provided the actual service to the passengers and;
3. the drivers are capable of operating the fleet's or association's on-board system that is equipped
to produce the approved form of receipt.
If the phrase, "A driver" were removed from this section,
it
would become much clearer that the section
is addressing the responsibilities of a fleet or association. When the drivers owned and operated
cooperative is up and running, this section would then apply to us as a fleet. All that we ask for at this
time is to be able to freely exercise our rights by using our individual and lawful devices to process
regular credit cards while we continue trying to provide better service to the customers.
As for the user-side subsidy (Call N Ride), we have the following to propose:
1. In order to accommodate all riders, we propose to use the fleet on-board system to service the
program and then pay 1% processing fee on each transaction to the fleet, or
2. That the Department makes arrangement to award each driver the contract to individually
service the program as an entity. This would then enable the DOT to inspect and approve each
contractor's device or system or service according to regulations, or
3. That the Department exempts drivers from servicing the program since (as in the case of
Orange Taxi Company which had been exempted from the same because
it
has less than 29
vehicles in its fleet) no driver
has
enough number of vehicles to be considered a fleet.
Reduced Taxicab Insurance Requirement:
The next big, or even bigger, issue on our (drivers) minds is to fmd out exactly when the reformed
insurance requirement of
50/100/25
became effective. The reduction of insurance requirement to the
level ofTNCs State requirement, we understood, is to even the playing field across the board with
TNCs. This means that the fleet and private owners would get to pay less monthly premium on the
vehicles insurance coverage. This also means that the drivers would get to pay reduced daily premium
on the vehicles they drive which,as a result, would immediately reduce the daily lease on the vehicles.
Mr.
Roshdieh, why is
Mr.
Lee Barnes telling drivers that the Department is responsible for the
companies uphold of the current lease rates because of its delay in setting the lease cap? We know that
lease cap setting has nothing to do with the immediate realization of cost savings prompted by the
insurance requirement reduction. We demand immediate enforcement of this law..
Immediate Relief Needed
Mr. Roshdieh, we, the drivers and private owners who are lawfully licensed by Montgomery
County to do business in the County as law abiding citizens and entrepreneurs have decided to STOP
being pushed around by the fleet owners whom your office is aiding by its inaccurate interpretation of
the law. We have therefore resolved to take the following actions, and more as the need may be, until
all of our concerns are thoroughly, rightfully and, conclusively addressed:
1.
Per 53-218 (e)(5) - "not require a driver or affiliate to use the fleet or association system
for processing credit card transactions...••"
Effective immediately:
We will stop providing service to credit card customers through the fleet or association
system.
@
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o
We can ONLY process credit card transactions through our individual devices unless the
fleet or association can beat or match the processing fees charged by our merchant and
equipment provider and/or the bank.
2 Per 53-224 - "Insurance required" provision:
A
On October 1,2015, the reformed minimum vehicle insurance coverage became
effective. According to Amalgamated Casualty Insurance Company estimate on
reformed minimum coverage of 50/100/25 (which, by the way, was requested by
CCTI), the fleet's monthly premium for leased vehicles is $208.00 or $6.93/day. Up
until date (over 42 days since this requirement became effective) leasing drivers are
still paying a monthly premium of $609.70 or $23.45/day.
Since this piece of legislation was primarily passed to relief the fleet and the drivers
from the burden of high insurance costs we demand:
1. that you use your authority under the law to call for reduced rates
immediately;
2. that our reduced premium be made effective from October 1,2015 and/or;
3. according to Mr. Barnes driver contract term regarding vehicle insurance
which states,
"Lessee agrees to purchase and maintain at all times a public liability
insurance policy in such amounts as may be required by law, naming Lessor as an
additional insured, and to provide proof of such coverage upon request",
we demand
the option to so choose.
3 Any Act or sign of retaliation against any driver or affiliate by the fleet or association:
Please be advised that ANY act or sign of retaliation against any driver or affiliate by the fleet
or association for demanding equitable measures to regain his or her rights will be met with
drastic actions against the fleet or association by the Union. We have for long been trying to
remain reasonable and accommodating but it has now became obvious that the fleet owners
have always taken our spirit of tolerance for weakness. We will no longer neither tolerate the
fleets inconsiderate acts and slaving mentality nor pretend to the customers as though
everything is well with us and the business. These types of fleet owners behavior caused this
County the serious shortage of experienced taxi drivers that we all are now experiencing. We
now say that it is ENOUGH. We want to concentrate on providing adequate and professional
taxi service to the well deserving residents and visitors of Montgomery County.
4
Our immediate course of action:
A
We will henceforth begin using our individual credit card processing device to
process ONLY credit and debit cards. The passengers will be provided with
receipts that will protect the fleet or association from any claim that may arise
from any processing transaction.
A
We will expect that all of the elements of the taxi reform are effective and shall
accordingly encourage drivers to utilize all of their rights.
A
Because we sincerely appreciate our customers, we wouldn't want to playa part
in further disruption of the already fragile transportation system in the County.
However, we shall reserve the right to take some serious actions if the drivers and
affiliates situations do not immediately improve significantly.
A
We will no longer be ignored. We, just like you, Mr Roshdeih, and the fleet owners
have families to raise. We need every single penny we earn to do so.
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We thank you very much for reading through this letter and hope that you do now understand our
plight. We do not mean to cause hann or, be disrespectful to anyone but we must do what we must to
feed our families. We thank you
in
advance for your cooperation and expediency in resolving these
matters to everyone's satisfaction.
Yours truly,
Peter Ibik, President, MCPDU
Copies forwarded to:
Mr.
Isiah Leggett, County Executive
Mr.
Sidney A. Katz, Councilmember
Mr.
Marc EIrich, Councilmember
Mr. George Leventhal, President, County Council
Mr.
Roger Berliner, Chainnan, T &E Committee
Mr.
Tom Hucker, Councilmember
Mrs. Nancy Navarro, Councilmember
Mr. Hans Riemer, Councilmember
Mr.
Reza Raoofi
~
Action Taxi
Mr.
Lee Barnes - Barwood Taxi
Mr. Robert Alexander - Orange Taxi
Mr. David Mohabbi - Regency Taxi
Mr.
Dewght Kines Sun Taxi
Mr.
Christian Sweeney' AFUCIO
Ms. Beth Levie
AFUCIO
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DEPARTMENT OF TRANSPORTATION
lsiah Leggett
County Executive
MEMORANDUM
January 15,2016
Al
R.
Roshdieh
Acting Director
TO:
Sidney Katz, Councilmember
Marc Ekich, Councilmember
Roger Berliner, Councilmember
Tom Hucker, Councilmember
Nancy Navarro, Councilmember
Hans Riemer, Councilmember
AI R. Roshdieh,
Acting:Jl~~0
Department
ofTr\'.PHS~Uw;Y""
Taxicab Credit Card Cost Recovery
FROM:
SUBJECT:
I am writing in response to your October 23,2015 letter, in which you asked me
to look into the fees paid by the taxicab companies for processing credit card transactions, and
what is included
in
those fees. I apologize for the delay
in
responding to your inquiry.
I was unable to obtain sufficient detailed information from the fleets in order to
develop a specific breakdown ofthe percentages paid by the fleets to credit card companies.
Most ofthe fleets simply responded that they either charge no additional fee to the driver, or only
1
%
additional. Barwood's response stated that "there are a multitude of components that go into
what a company is charged for various 'merchant services' so the fee is not a flat x.x%" and " ...
the fees are composed of and vary as follows: Transaction Fees, Basis Point Fees, Verifone Fees,
Airtime Fees, store/forward floor fees, and Web services fees." Barwood additionally stated
their costs are " ... based on an average trip for credit cards" and "Verifone including Transaction
Feed Equipment fees Airtime
&
web portal fees 6.45%".
In
regards to your question about other devices accepting Call-N-Ride, we have
not yet
been
able to identify any such device. My staff is continuing to look for potential
solutions.
If
you have any further questions, please feel
.free
to contact me or my Chief of
Management Services, Anthony Alexiou at 240-777-7198 or by email at
Anthony.alexiou@montgomerycountymd.gov.
Office of the Director
101 Monroe Street, lOth Floor • Rockville, Maryland 20850 • 240-777-7170 • 240-777-7178 FAX
www.montgomerycountymd.gov/dot
montgomerycountymd.gov/311
301-251-4850 TTY
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Isiah
Leggett
County Executive
Marc P. Hansen
County Attorney
OFFICE OF
THE
COUNTY ATTORNEY
MEMORANDUM
TO:
AI
Roshdieh, Director
Department of Transportation
Edward B. Lattner, Chief
Division of Government Operation
Robert
J.
Birenbaum
j(f(S
Associate County Attorney
January 5, 2016
Bill
Review of
Bill
No. 53-15E
VIA:
£i3f-­
FROM:
DATE:
RE:
Background
This past summer, the County enacted significant amendments to Chapter 53 of the
County Code (the "Taxicab Code") that overhauled the County's regulation of the taxicab
industry.
Unlike this past summer's sweeping refonns to the Taxicab Code, Expedited Bill No.
53-15
(the "Bill")
bas
a narrow focus that relates to credit card transactions and the requirements
of the device that processes those transactions.
Taxicab passengers may pay their fare
in
cash or with a credit card. Unlike with cash,
when a passenger uses a credit card, the driver receives his remuneration for the fare from the
taxicab company.
As
such, the driver has been entirely dependent upon the taxicab company for
reimbursement for the fare when processed through the taxicab company's credit card machine.
Credit card companies impose fees upon the taxicab companies for credit card transactions.
In
consequence thereof, the taxicab companies pass those charges onto drivers when reimbursing
the drivers. However, current law also allows the taxicab companies to impose upon the drivers
an additional charge of up to
1
% above the costs for processing credit card transactions. That
means that ifthe credit card company charges a fee of3% of the fare for processing a credit card
transaction, the taxicab company may impose upon the drivers a charge ofup to 4%. The
imposition of charges in excess of costs
bas
caused great acrimony within
the
taxicab industry.
101 Monroe
Maryland 20850-2540
(240) 777-6700. TID (240) 777-2545. FAX (240) 777-6705
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·!
. !
AlRoshdie
January 5, 2016
Page
2
Discussion
Expedited Bill
53-15
amends
§
53-218(f)
of the County Code to preclude taxicab
companies from imposing upon drivers any charges in excess ofthe fees bome by the taxicab
companies in processing credit card transactions. This part of the law is clear. However, the law
should be strengthened to mandate taxicab companies to provide the Department of
Transportation their fee arrangement with various credit card companies in processing credit card
transactions on a regularly scheduled basis. Currently, there may not be sufficient authority in
the Taxicab Code to mandate and compel taxicab companies to provide such information to the
Department of Transportation, nor are there any regulations addressing this topic. The
Department of Transportation needs the ability to verify the fee agreements that credit card
companies have with taxicab companies in order to investigate complaints by drivers who claim
that they are being overcharged. Without such clearly defined authority.
the
Department of
Transportation may not be able to effectively police taxicab companies for compliance with the
County Code.
A policy matter: Expedited Bill No.
53-15
also amends
§
53-313
ofthe County Code.
Under current law, every system used in a taxicab to process credit card transactions must also
be able to process payments for the County's "Call-n-Ride" program. The Call-n-Ride program
offers subsidies to low-income persons who are elderly or have disabilities and need
transportation for medical appointments.
1
The Call-n-Ride subsidy is processed electronically
through the crtXlit card reader. The
Bill
proposes to eliminate the requirement that every system
used to process credit cards have the ability to process Call-n-Ride subsidies. This amendment
may have serious implications for the Call-n-Ride program because not every credit card reader
has the ability to process Call-n-Ride payments. The Call-n-Ride program only processes
subsidy payments through electronic means because the previous paper-voucher system was
susceptible to abuse and fraud. lfthe County wis:Q.es to avoid disruptions
in
service
to
those who
are eligible for theCall-n..:Ride program, the Bill should be amended to require that a system be
in place to process Call-n-Ride payments.
cc:
Marc
P.
,Hansen, County Attorney
Bonnie Kirkland, Assistant CAO
Josh Hamlin. Legislative Attorney
15·007567
OCA bill
review
1
http;llwww.montgomerycountymd.gov/dot-transitiseniors.html
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COMCOR - Code of Montgomery County Regulations
COMCOR 53.223.01 Taxicab Participation in User-Side Subsidy Programs
53.223.01.01 Background Information
Montgomery County Code Section 53-223 requires that a regulation be established to define
participation by taxicab fleets or associations in the County's user-side subsidy programs.
53.223.01.02 Participation Requirements
1.
Taxicab fleets or associations that hold 30 or more taxicab Passenger Vehicle
Licenses (PVLs) must participate in the County's user-side subsidy programs.
2.
Taxicab fleets or associations that have 29 or fewer Passenger Vehicle Licenses
(PVLs) are encouraged to participate in the County's user-side subsidy programs but are not
required to participate.
53.223.01.03 Effective Date
This regulation becomes effective when the Council adopts a resolution approving the regulation
or on a later date specified
in
the regulation. If the Council takes no action of approval or
disapproval, the regulation becomes automatically effective 61 days after the Council received it,
or on any later deadline set by regulation.
(Administrative History: Reg. No. 21-07 (Method 2); Orig. Dept.: Public Works and
Transportation)
American Legal Publishing Corp.
1
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Hamlin, Joseph
From:
Sent:
To:
Subject:
Attachments:
Kines, Dwight <dwight.kines@transdev.com>
Thursday, February 25,20165:42
PM
Hamlin, Joseph
Credit Card Bill 53-15
Amendments to Council Bill 53 - 2-24-16 - 4.pdf
Josh,
Please see the below letter that I will send to the Council.
I may be unable to attend the hearing due to travel but wanted to submit this from Sun Cab.
Thank you
DRK
Montgomery County Council
100 Maryland Avenue
Rockville, MD 20850
Dear Councilmembers,
I am writing to express my concerns with Expedited Bill 53-15, Taxicabs - Credit Card Transactions and efforts to allow
taxicab drivers to use personal credit card processing systems. I respectfully ask that you reconsider this proposal and
support the attached amendments to Bill 53-15.
Last year the Council spent a great deal oftime revising Chapter 53. Here we are yet again facing additional efforts to
increase regulation on our industry. By legislating how we handle credit card fees and other costs, the Council is
essentially making financial decisions that should be left to individual business owners. Each taxi company operating in
the County has its own overhead and incurs costs for processing credit card transactions. However, we all share the same
concern that our ability to compete in a changing market is hindered by legislation like this one.
Furthermore, Bill 53-15 raises serious consumer protection issues for taxicab passengers.
As
a company, we take the
safety of our passengers and the security of their personal information seriously. We use secure credit card terminals and
software to make sure our customers can have the utmost confidence in the safety of their information anytime they swipe
their credit or debit cards. We also assume responsibility for transactions processed through our machines and have
customer service policies in place to address any issues.
Allowing drivers to use personal payment devices without informing the customer that it is not a fleet-approved payment
terminal violates the basic expectations of the relationship with our passengers. Fleets cannot guarantee the security of
transactions or accuracy of the amount charged if we do not have control of the equipment. Therefore, we should not
be
held responsible for transactions that are processed in non-fleet equipment. Passengers should know this before using a
driver's personal payment device so they can make an informed decision.
While I strongly oppose allowing drivers to use these devices, I urge the Council to adopt the attached amendments to Bill
53-15 and ensure the same consumer protection standards apply regardless of which payment system the passenger
chooses.
Sincerely,
Dwight Kines
DWIGHT R. KINES
I
VICE PRESIDENT -
MID ATLANTIC REGION
1
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AMENDMENTS TO CHAPTER 53 - TAXICABS
53-218. Responsibility of licensees, affiliates, and drivers.
* * *
(f) A licensee must not impose on a driver or affiliate:
1) [a charge of] charges totaling more than [1
%
over bank, merchant services and equipment provider
fees paid by the licensee on any credit card transaction] 5% of any credit card transaction; or
2) any other charge of a type or amount other than those on the list adopted by regulation under
Section 53-111.
* * *
53-313. Passenger receipts; credit card transactions:
Ca) A driver must accept a credit card payment from a passenger.
[a](hl A driver must:
I) make each credit card paying passenger aware of all such payment options including those
provided by the fleet; and
[1]21
give each passenger a printed or electronic receipt immediately at the end of each trip showing the
name of the fleet or association, the taxicab number, the time and place of origin and destination of
each trip, and the amount of the fare, on a form authorized by the Department, unless the passenger
declines to receive the receipt.
[b]ill Any system of service used to process credit card transactions must:
1) Be compliant with all applicable tax laws;
2) Accept payment through any County user-side subsidy program;
3) Be compliant with PCI standards; and
[3]1} Be approved by the Director.
Cd) A driver shall not:
1) refuse to process a passenger's credit card transaction through the processing system/equipment
provided
by
the fleet: or
2) require a passenger to use equipment other than that provided by the fleet.
(e) Ifa driver processes a credit card transaction with equipment or a system not provided by the fleet, in
addition to the requirements of 53-3 13(a),
(b)
and (c), the driver shall, on a form authorized
by
the Department
and prior to the transaction:
1) provide the name, phone number and identification number of the driver,
2) state that the transaction is taking place outside the jurisdiction of and without the knowledge of the
fleet;
3) state that the equipment is not approved or provided by the fleet;
4) state that the fleet is only responsible for disputes related to transactions processed through its own
equipment and any dispute stemming from driver-provided equipment must be addressed directly
with the driver; and
5) provide information regarding filing a complaint with the Montgomery County Office of Consumer
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SAN FRANCISCO TRANSPORTATION CODE (Accessed
02/0112016)
SEC. 1124. FEES, RATES AND CHARGES.
*
(b)
Taxi Fares.
*
*
*
*
*
(5)
Credit Card Processing Fees. A Driver may elect to establish his or her own
account for credit card payment processing with any merchant account
service that conforms to PCI DSS standards and provides an electronic or
paper receipt clearly indicating that the payment was made for San
Francisco taxicab fare, the date, the fare amount and a toll-free number for
passenger and Driver payment inquiries to the merchant account holder or
its customer service representative; provided, however, that a Driver must
allow a passenger to choose to pay the fare using any available payment
system, at the passenger's option. No Color Scheme may retaliate against a
Driver for electing, or not electing, to establish his or her own credit card
processing account.
*
(f)
*
*
Credit Cards. Drivers must accept major credit cards (including at a minimum Visa,
MasterCard, American Express and Discover), as payment oftaxi fare. This section
shall be strictly enforced.
**"PCI DSS" shall mean the Payment Card Industry Data Security Standard, which is a worldwide
information security standard assembled by the Payment Card Industry Security Standards Council
to help organizations that process card payments prevent credit card fraud.
(SEC. 1102)