Seven Montgomery County council members on Friday said they think Barwood Taxi may be charging some of its drivers more than is allowed every time a passenger pays a fare with a credit card.
Taxi cab companies, such as North Bethesda-based Barwood, lease out many of their vehicles to drivers who are required to pay the company certain fees in order to use the company’s dispatch service and marketing.
In July, the County Council passed a law that provided more county taxi licenses that will go directly to drivers, meaning those drivers won’t have to pay the fees. The law also limited how much a taxi cab company can charge a driver for credit card transaction fees whenever a passenger uses a credit card.
As stated in the law, a company cannot charge a driver more than 1 percent over the actual credit card transaction fee.
But council members said they’ve heard from drivers that Barwood reduced its “Technology Marketing and Service Fee” from 7.95 percent to 7.45 percent of each credit card transaction.
That would mean if Barwood is following the law, each credit card transaction fee is costing the company 6.45 percent, a rate the council members say seems too high.
Council members said that as an example, the county charges residents just 2.5 percent to cover credit card processing fees whenever residents use a credit card to pay the county.
“In particular, I felt very strongly that the costs of doing business with credit cards—one of the greatest conveniences for passengers—should be capped at no more than 1 percent for administrative costs above the discount rate,” said council member Sidney Katz. “I’m therefore very concerned about what I’m now hearing that drivers are being required to pay.”
The seven council members—Katz, Marc Elrich, George Leventhal, Roger Berliner, Tom Hucker, Nancy Navarro and Hans Riemer—detailed their concerns in a letter to Al Roshdieh, the acting director of the county’s Department of Transportation (MCDOT).
They asked Roshdieh to investigate what is being included in the 7.45 percent credit card transaction fee charge “so that we may assess whether additional legislation is needed to address or clarify this issue.”
“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 permitted by this provision,” the council members wrote.
Lee Barnes, CEO of Barwood, couldn’t be reached for comment.
