Roughly Speaking podcast: Halloween special: Best of horror movie music (episode 168)

Swipe and ride [Editorial]

Harried commuters will be gratified by the Maryland Public Service Commission's decision last week to require taxicabs operating in Baltimore City to install credit card-reading devices in the back seat where passengers sit. The new rule, which goes into effect at the end of the year, will allow customers to just swipe a Mastercard or Visa to pay the fare rather than having to carry cash. It's a convenience riders in other cities have long enjoyed, and it has probably taken a lot of the anxiety out of hailing a cab. It's about time Baltimore caught up with the trend.

Many of the city's cab drivers, of course, saw the handwriting on the wall long ago and installed back-seat card readers on their own initiative. The devices are a boon for passengers no longer obliged to carry around wads of bills and change when bad weather or a sudden emergency bids them to take a cab to arrive at their destination on time. For drivers, the card readers confer an enhanced sense of security because there's less cash on board to tempt potential robbers and less incentive for would-be fare-beaters not to pay up.

Fortunately, Baltimore's major cab associations, including Veolia Transportation, which operates the city's Yellow, Checker and Sun fleets, generally support the change even though questions remain about whether the PSC's deadline for installing the devices is realistic. A spokesman for Veolia said last week that he worries the commissioners have given drivers only a few months' notice before the rule goes into effect, which may not be enough time for all of them to make the switch.

Most of the drivers who use Veolia's dispatching, accounting and other services, for example, are individual owner-operators who hold one of the 1,150 taxi permits the PSC issues to Baltimore drivers. Under the new rule, those drivers will be personally responsible for the costs of installing the devices, and some fear that could represent a financial hardship. The devices cost about $700, and there are additional costs for installing them and for the software that links them to the association's computer network.

Overall, we're confident such problems can be overcome, however. In the past the PSC has shown it can be flexible in dealing with such issues, and Veolia companies already are talking about requesting an extension of the Jan. 1 start date if it appears some of their drivers may have trouble meeting the deadline. There's nothing in the plan the PSC and the companies and drivers can't eventually work out without imposing undue burdens on the industry.

What should really worry the city's cab companies isn't how quickly they can inch up the card-reading technology another notch but how far behind in the race they still are against newer tech-savvy competitors like Uber and Lyft. Those companies, which continue to operate in Maryland as the PSC weighs whether they should be subject to the regulatory restraints imposed on traditional cab associations, threaten to upend the industry with their innovative car-for-hire business models.

The cab associations complain that ride-sharing companies, which use cellphone apps to pair customers with drivers, represent unfair competition because they don't have the costs of insurance, permitting and vehicle inspections that traditional cab companies bear and because they can adjust their rates up or down to match consumer demand. Earlier this year a public utility law judge, Terry Romine, issued a proposed order finding that Uber is a common carrier and a public service company subject to commission regulation. But Uber has appealed, and its ultimate legal status remains in dispute. Meanwhile, cab companies are pursuing separate litigation against Uber on antitrust grounds.

It will probably require new legislation in Annapolis to resolve that issue. What is certain, however, is that it will be difficult if not impossible to turn back the clock on the new technologies and business models the ride-sharing companies have introduced. Sooner or later the PSC or the General Assembly will have to acknowledge that and come up with a formula that somehow creates a level playing field for both the high-tech newcomers and the traditional cab associations. Compared to the shocks the industry is likely to undergo as a result of those changes, installing back seat card readers could seem like a mere bump in the road.

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