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Comment by danso | Hacker News Reader

The cabbies raised a ruckus when credits cards were introduced...however, data shows that when rides were cash only, cabbies received 10% tips. With credit cards, the average was 22%. Hard to complain about that: http://www.nytimes.com/2009/11/08/nyregion/08taxi.html

The Times also reported that the fact that cabs have cards - and livery cars do not - may have helped the taxi industry while hurting the private car business. http://www.nytimes.com/2009/03/25/nyregion/25taxis.html

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Bet they get more rides, too.

I'm much more willing to catch a cab in NYC than I am in Chicago or Milwaukee, because I usually don't carry enough cash for a ride and I'm usually not in the mood to squabble with the driver. I swear, I can usually walk to my destination in the time it takes to watch a Chicago cabbie pantomime with the card reader in an effort to convince me it's broken.

Before you get in the cab ask, "Can you accept credit cards right now?" I found they won't hassle me if they know I'm onto their scam.

If you're not too short, they usually take the cash over the card. You get a cheap ride and they don't get all pissy. I do it all the time.

Income tax + payroll taxes + state income tax can easily total 40 percent, so a 12 point bump in tips is not a big disincentive to tax avoidance.

And in NYC they have to pay city income tax on top of all that.

(If the cabbie incorporates and maintains a business bank account and payrolls himself and files taxes correctly, he'll only be paying 15-25% on some fares. I'd be surprised if any significant number of cabbies bothered with this.)

Livery cars take credit cards. The article explains that lets livery cars cost more than cabs, and that is why cabs are winning. Also, livery cars generally don't cost more than cabs for common trips like airport, so I take that whole article with the usual grain of salt NYT requires for its writing.

Yup - the three default options for tip are 20/25/30%, so people are tipping a lot more than they would in cash because they can just hit one of those buttons and not have to calculate a tip in their head.

cabbies received 10% tips. With credit cards, the average was 22%. Hard to complain about that

Credit cards leave a trace and are taxable. Cash, not so much.

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