Technology in Cabs Takes Different Routes

Perry Santanachote |

It’s shaping up to be The Year of the Taxi, as the New York City Taxi and Limousine Commission (TLC) continues to announce new tech features seemingly faster than a New Yorker can hail a cab. The push for more in-taxi technology innovations comes as contracts with Verifone and Creative Mobile Technologies (CMT), the two sole companies that dominate the taxi mobile-payment market, expire in early 2013.

Verifone’s new tablet will soon allow customers to buy a lottery ticket or swipe credit cards en route for a quicker exit. Photo courtesy of Verifone.

The TLC is  accepting proposals for alternative in-taxi technology systems through May 4, which means for the first time, the passenger experience inside New York City cabs will vary.

Until now, the in-taxi, integrated systems of CMT and Verifone were similar: they processed credit card payments; featured ads and public service announcements and programming provided by media partners ABC and NBC; advanced data collection capabilities via GPS; and provided two-way messaging capabilities between the TLC and drivers. Both companies were mandated to use the Taxicab Passenger Enhancements Program (TPEP) for transactions, and still are.

Five years into the program, the two companies are beginning to diverge in terms of technological features and services.

The latest news comes from New York City-based CMT, which launched its software for the visually impaired on Tuesday, tapping into an estimated 362,000 New Yorkers that until now couldn’t use the taxicab credit card payment systems.

Former Governor David Paterson demonstrates CMT's new software for the visually impaired. Photo by Perry Santanachote.

Both CMT and Verifone, whose cab operations is headquartered in New York City,  have recently launched newer, faster hardware with potential for more passenger interaction and services. Verifone’s new tablet, currently being tested in 50 cabs, will soon allow customers to buy a lottery ticket or swipe credit cards en route for a quicker exit. They’re also toying with e-commerce ideas such as theater ticket sales.

“We’re always trying to find ways to entertain and provide valuable services to passengers,” said Chris Polos, Verifone’s vice president of media. Verifone has used its new software to develop games for their advertisers. For instance, they made an on-screen version of UNO for the game’s 40th anniversary,  a Seinfeld trivia game for Fox, and a Frogger-like game for IBM.

Cliff Adler is one of 50 New York City taxicab drivers with Verifone's new tablet. Photo by Perry Santanachote.

But not everyone is game for these new features in a taxi. “I already don’t like the credit card systems,” said Cliff Adler, a cab driver who’s been in the business for 37 years. “I will be 1,000 percent against it if they put in screens that allow people to purchase tickets or make reservations. You think I’m going to wait on a street corner while some clown says he can’t get out yet because he’s waiting for his confirmation?”

Verifone replaced the screen in Adler’s cab with the new tablet a few months ago, and he said it’s quieter, faster and easier, but he still longs for the days when all he had was a wind up meter. “Everything the TLC has been coming out with has been asking the customer, ‘How can we make you feel warm and fuzzy?’ But they don’t do much to help us drivers.”

The revenue generated from ads and on-screen programs fund the taxicab systems so that they don’t cost anything for the drivers. “It’s the necessary evil,” said CMT President Jesse Davis. “In contrast to Verifone, we designed our program to be subtler and quieter. We don’t offer a lot of buttons or features to navigate because we have found that the more interaction involved, the more passengers become frustrated. Rides aren’t long enough to do much, and from an ad perspective that’s a disaster.”

“We’re not interested in passengers sitting in the back seat playing Angry Birds, said Michael Woloz, a CMT spokesperson. “The screens shouldn’t be used for frivolous things. Instead, we used our platform to design a feature for the visually impaired. That’s what we call innovation.”

Woloz said CMT quietly rolled out their new “Next Generation PIM” screens one year ago. It is currently installed in 1,200 of the 6,600 cabs they service. For advertisers, the company opted for geo-tagged ads so that a GAP ad plays just as your cab is passing the GAP store on the street. “The sky’s the limit,” said Woloz. “It’s just a matter of choosing what’s appropriate for a taxicab.”

In March, the TLC approved a pilot program with Square, a Silicon Valley startup, to test out an alternative credit card payment plan that operates on Apple iPads and iPhones—a system that many market veterans don’t find appropriate for the complexities of New York City’s taxicab network.

Square’s system is powered by the same mobile payment processing technology that the company built itself on in 2009—a phone attachment and app that’s popular with street merchants. This pilot program is meant to test its use as another payment option. “The fact that more than 55 percent of all fares are paid with credit cards easily bears out that New Yorkers want this [credit card payment options],” said a TLC spokesperson.

Both CMT and Verifone use the mandated TPEP system. Like TPEP, Square’s iPad system tracks and records trip data, processes credit card payments and enables communication between drivers and the TLC, but without ads or television programs. The company currently operates in cabs in several other cities, but not with a program as complex as this. Square is hoping its lower rate will woo drivers. “The 2.75 percent fee per swipe with Square is among the lowest in the industry and in many instances, significantly lower than the fees most taxi drivers have to pay to accept credit cards,” said a Square spokesperson. Right now cab drivers pay an average five percent per transaction.

“Square’s business is payment, and their intention is to capture and disrupt the current taxi market, but let’s not put the cart in front of the horse,” said Woloz. “There’s a tremendous backend fleet management system that the Square program does not yet include.”

Davis is skeptical that Square’s iPad system will hold up. “An iPad touch screen wasn’t meant to be used 24/7,” he said. “Plus, it’s not going to have anything but a map on it, no features, no web, because of credit card security restrictions.”

What ultimately matters to the TLC, Davis said, isn’t a sexy new gadget, but data collection and accountability. “That’s what makes it work, and that’s something Square can’t do.”

Managing and supporting cab fleets is more complicated than it looks, said Polos, but he welcomes the competition. “We’ll make sure we’re ahead of the pack, but it’ll certainly be an interesting 2012.”

For more technology news, watch “MetroFocus: The Tech Economy,” airing on THIRTEEN on June 30 at 5 a.m. and 7:30 a.m. and July 12 at 8:30 p.m.; on WLIW at 5:30 a.m. on June 30; on NJTV on July 1 at 5:30 a.m. and July 2 at 4:30 a.m.



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