Surprise fees surface in taxi cab receipts

An investigation by 7 On Your Side has revealed that many cab passengers may be paying an illegal fee and not even know it.

October 4, 2010 10:57:43 PM PDT
An investigation by 7 On Your Side has revealed that many cab passengers may be paying an illegal fee and not even know it. Not only are most passengers unaware of this practice, but apparently most regulators are too.

Greg Klenske travels frequently on business. He recently took a cab from the Oakland airport and paid his $68 fare using his credit card.

"I checked my credit card statement a month later and I noticed there was a $74 charge instead of a $68 charge," he said.

He called the 800-number on his receipt and was told a $6 voucher fee had been added, something that caught him by surprise.

"I don't think it would be obvious to anyone filling out the credit card receipt or looking in the cab or talking to the cab driver that I was going to be paying a voucher fee," Klenske said.

But it was in small print -- a voucher fee of $3 per passenger and in even smaller print it says for rides over $50, additional voucher fees automatically apply.

The fee is assessed by a company called Taxi Pass.

"Taxi Pass provides cashless payment options to passengers by allowing them to buy a pre-paid taxi pass voucher," Taxi Pass founder Jason Diaz said.

But Klenske says he didn't buy a voucher, he simply gave the cab driver his credit card. Joe Ridout of Consumer Action says such a fee is banned in California.

"If 1-800-CAB-RIDE has designed a policy to add deceptive surcharges in to their price for different cab vendors, then that's fundamentally prohibited in California," he said. "You cannot do that and 1-800-CAB-RIDE should change that policy because they're actually breaking the law."

We brought this to the attention of the city of Oakland and the office that administers taxi permits.

"I actually did not know much about Taxi Pass, nothing at all," Arturo Sanchez from the City Administrator's Office said.

But the City Administrator's Office looked into it further and reviewed it with the city attorney, who concluded the fee is banned by both the state and the city.

"If you're adding a surcharge for service that's rendered, it is a violation of our municipal code for taxi cab drivers and taxi cab companies to pass that surcharge onto the passenger," Sanchez said.

Taxi Pass acknowledges other jurisdictions in other states have accused it of this as well.

"All of those are not prohibited by California or Oakland law," Diaz said.

Drivers 7 On Your Side talked to say they like the program because it saves them money.

"It's good for the drivers, but not the passengers" taxi driver Nirmal Gill said.

Nonetheless, the city of Oakland has sent Taxi Pass as well as cab companies and drivers letters ordering it to cease and desist from adding the surcharge to fares.

"We appreciate being notified about this very specific circumstance. We'll do our best to make sure that this is addressed quickly and swiftly and we believe that our taxi cab drivers are going to comply," Sanchez said.

We also referred this to the state as well and the state attorney general's office says it would look into this further.


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