If you have caught a taxi and paid by EFTPOS or Credit Card chances are you've been doubled charged on surcharges.
You might be familiar with the all too common scenario of jumping in a Taxi after a few drinks after work and taking that short trip home or to the nearest train station. It turns out that Taxi services profit more with short trips, infact surcharges alone helped raise $90 million in extra revenue for Taxis services in 2012.
You leave the pub in a taxi, soon after you arrive at your destination. The fare comes to $8.30 and you pay by EFTPOS or Credit Card.
Promptly the taxi driver informs you that the fare needs to be a minimum of $10.00 in order to pay by EFTPOS or Credit Card, so you agree.
The Taxi driver enters in the fare details and you are now prompted to pay $11.00. Wait.. they forgot to mention that an EFTPOS or Credit Card transaction also attracts a 10% surcharge on top of the minimum $10 charge.
You have now been successfully ripped off $2.70 in extra charges just to pay by EFTPOS or Credit Card and not only that, it's a double charge.
The introduction of the minimum of a $10 transaction on EFTPOS and Credit Cards in retail was to cover the banks fee's in processing the transaction. Other retail outlets introduced a 2% - 4% surcharge for EFTPOS and Credit Card transactions to cover these bank fee's.
EFTPOS transactions these days usually do not attract any fee's for retailers or are around a 1% surcharge depending on the volume of transactions. Credit Cards such as Mastercard and Visa are around 2.4 - 3.5%.
It becomes clear now that the Taxi services minimum of $10 transaction plus a 10% surcharge on top of that is not so modest, nor should it be legal. There is absolutely no reason for Taxi services to be applying both charges.
There is good news on the horizon with reforms to the Taxi Industry thanks to Barry O'Farrels Government where Taxi surcharges will be capped at 5%, however this does not solve the double charging issue. The Daily Telegraph recently published an article further discussing the reforms
O'Farrell Government will halve the Taxi card surcharge in NSW
Professor Allan Fels found the 10% surcharge was costing passengers at least $30 million a year and recommended it be slashed following his inquiry into the troubled taxi industry.
He found up to half the surcharge was being paid to drivers in rebates rather than being used to process the card payment.
We spoke to Warwick Ponder from EFTPOS Australia regarding merchants applying surcharges to EFTPOS services. He had the following to say:
"Merchants set their own minimums and surcharges for eftpos transactions. We would prefer they didn't and the majority of retailers don't set either minimums or surcharges.
Regarding taxi fares, the former NSW Premier made an announcement about surcharging this recently, indicating they would restrict the maximum surcharge to 5% as has already been done in Victoria."
We have asked Central Coast Taxi's to explain and justify charging a minimum plus a 10% surcharge for using EFTPOS and Credit Cards in their Taxi's
What you can do to take action against Taxi services double charging and ripping you off is simply refuse to pay the minimum charge and offer to pay a 5% surcharge only. We don't solve the problem by paying cash as this only further helps Taxi drivers in taking cash jobs and not declaring revenue.
Better still don't use Taxi services at all and carpool with LifeSocial.
Pictured above: the fine print that Taxi's think makes the practice of double charging acceptable.
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