Top

blog

Stories

 

Jack Dorsey's Square Credit Card Readers Banned in St. Louis Taxis, Drivers Fight Back

Categories: News

jack-dorsey-file.jpg
David Shankbone photo via
Jack Dorsey.
Last month, Jack Dorsey, St. Louis native and Twitter co-founder, was back in his hometown to kick off "Let's Talk," an event series for business owners, hosted by Square Inc., his other very successful company. This startup is most known for its tiny, convenient Square credit card readers, which plug directly into mobile devices. It's popular across the country -- but not all local fans of the product can use it.

Raja Naeem, a St. Louis cab driver, had a brief conversation with Dorsey after his event, letting him know that the St. Louis Metropolitan Taxicab Commission (MTC) has formally banned the credit card technology -- and is even fining drivers who use it.

"I shook his hand and I said, 'You are promoting your product here, but I'm getting tickets from St. Louis officials and I've got to pay $150 fines,'" Naeem recalls to Daily RFT.

See also: St. Louis Cabbies Allowed to Wear Blues Gear As Muslim Driver Fights to Wear Religious Garb

Naeem says he showed Dorsey a printout of the homepage of stl-taxi.com, which currently states in bold and underlined type: "The Square Credit Card Reader is not an MTC approved device and use of the Square device is in violation of the MTC Vehicle for Hire Code."

Why is this cab driver getting into so much trouble for using Square -- and can Dorsey and his company do anything about it?

square-reader.jpg
Chris Harrison photo via
Square reader.

The dispute over the use of Square is the latest fight between metro taxi drivers and the MTC, which oversees licensing and regulation of local taxi companies and their cabbies. As we covered earlier this year, Naeem was at the center of one of the most high-profile controversies, in which he alleged that the MTC was discriminating against him and harassing him over his religious garb.

Now, Naeem and a group of angry drivers are alleging that MTC officials are violating the law by banning this simple technology that saves drivers and passengers money. The dispute has the added twist -- that both sides acknowledge -- of the credit card readers being the product of Dorsey, a nationally recognized tech entrepreneur with very strong St. Louis ties.

Square officials even tweeted about the joy of seeing the reader used here on the company's recent visit:


The protesting drivers and MTC officials tell two very different stories about why the use of Square is currently prohibited.

According to the drivers, taxi commissioners do not want drivers to use Square, because they can get better profits from the existing credit card transactions. A petition signed by fifty drivers, full document on view below, says drivers in the current system are forced to give over (depending on their company) anywhere from five to thirteen percent of their pay from credit card transactions to their companies, "placing a severe economic burden on the taxicab drivers of St. Louis."

They argue that there is a clear conflict-of-interest, since three commissioners who vote on the policy are also owners of the companies that benefit from the transactions (and thus would not want Square to be used). This, the petition alleges, is a violation of Missouri statute, which says officials cannot use their authority for their own financial gain.

"We as drivers licensed by the MTC should be allowed to use any form of electronic payment from our customers agreed on between the driver and the customer," the petition reads.

raja naeem press conference.jpg
via KSDK video.
Raja Naeem speaking at a press conference last year.

"They are basically taking money right out of the cab drivers' pockets and the customers pockets," says attorney Drew Baebler, who has represented Naeem and drivers in a number of matters.

The MTC passenger "bill of rights" -- copy on view below -- also says passengers should be allowed to pay with any major credit card without additional charges. The system MTC requires mandates customers pay $2 convenience fees.

"They're forcing these drivers to basically extort money out of the passenger," says Chuck Cole, another longtime local cab driver. "Drivers don't want to charge passengers these fees."

Naeem provides us with his recent receipts, which he says shows him losing more than ten percent of the charges through the current system. Square's rate is 2.75 percent.

Ronald Klein, director of the Metropolitan Taxicab Commission, defends the policy to Daily RFT, arguing that the MTC has the passengers' interest in mind and has not violated any laws or codes.

Most importantly, he says that he is in talks with Square officials and is hopeful that the MTC may be able to permit its usage in the future.

square-lets-talk.jpg
via Square / Facebook
Square's "Let's Talk" series.

Klein argues that the only reason MTC has not allowed Square thus far (and it's the commissioners who ultimately vote, not him) is that he and the commissioners are not confident yet that they could easily get to the bottom of fraud accusations from customers.

"My job is to protect the public," he says. "When you use Square, I can't find out whether you overcharged."

If each individual driver opens an individual Square account, he says, "whenever somebody makes a complaint about being overcharged, there are 1,300 separate vendors out there to try and track down. It's burdensome."

Continue for more of our interview with Ronald Klein and for Square's response.

My Voice Nation Help
18 comments
pitts2011
pitts2011

look out guys,..CabbyPay's will be the number one choice for credit card processing product and services,.because it is a simple and cost-effective way to get paid (with 0 percent per swipe and with funds deposited in the bank account with in minutes, not days). CabbyPay officials also point out that the transactions are secure and  encrypts card information at the moment of the transaction.  CabbyPay is now live in Chicago, and coming to the St. Louis area soon!


http://cabbypay.com/

sftaxi8041
sftaxi8041

Good old St. Louis because of this article as a cabbie I will never spend a dime in that d  city. thetaxidriversguidetosanfrancisco

Scott Tyler
Scott Tyler

Cubs World Series Algorithm Predictor.

Mark Herman
Mark Herman

square, because every entity that touches city government is corrupt the taxi cab commission is controlled by the very people that profit from the fees collected for taxi's....if the people of st. Louis continue to re-elect the people in charge, st. Louis will continue to die the same slow extinction we've recently witnessed in Detroit. Tax dollars flow in and into the powers that be's pockets. prediction...in (5) years the police & fireman unions will be stripped of their pension funds because the city's powers that be will usurp these funds in their effort to continue to fund the city.

Drew Scott
Drew Scott

First off, I have read the fine print, have you actually read it? As someone that uses it, I can state first hand that what I posted is correct. Swiped transactions - no holds, generally in my account the next day. Online transactions - same as swiped. Manual transactions - first $2002 during any rolling 7 day period is treated the same as swiped. Amounts over the $2002 limit can be held up to 30 days, none is held indefinitely as you claim. Apparently I hit a nerve when I mentioned fraudulent transaction. Are those your problem? Manual transactions have the most room fro fraud and that is why they hold excessive amounts that are manual, to try and limit fraudulent exposure. If you are an honorable and reputable business person and establish a track record as such, then they will not even hold those amounts. Facts are facts, and those sir are the facts, makes me wonder what you were trying to pull.

Jay Smith
Jay Smith

Howsabout, "no". The hold goes for maual as WELL as swiped. And nice attempt at trying to make it look like I was trying to do something fraudulent, but wrong again. You should maybe read the fine print a bit better before blindly "White Knighting" a company that doesn't even allow you to speak to a REAL person on the phone. Don't believe me - I dare you to find out who "Micah" is from the help staff. Go on, I'll wait.

Drew Scott
Drew Scott

You are wrong. There can be a 30 day hold on manual transactions over a 7 day period of a $2002 limit. Swiped transactions and online purchases have no holds and are deposited in your account usually the next day. Once you have been in good standing and are not trying to process fraudulent manual transactions that limit can be lifted. You should really get your acts straight.

Jay Smith
Jay Smith

Square seems like a cool, glossy option for small business owners, but I learned the hard way to steer clear of it. If you're only using it for occasional small transactions it's one thing. But if you have large transactions they can hold your money as long as they like before releasing it to you. Also - there is ZERO customer support other than email. You cannot reach one person by phone. Email replies are all pre-made auto responders, and WORST, if you have large transactions that your customers decide for any reason whatsoever that they want to initiate a chargeback, square does not fight the credit card company on your behalf. If an ex-client claims goods or services weren't "up to their liking" whether they received them in full or not they can take their money back. And don't believe the myth about only having a few months to file a charge back. You can go as far back as 2+ years. Square will not help you dispute, they will hold your money as long as they like, and anything over $2000 in a week they will hold until they deem it "time to release your funds to you", and that can be months. Square is a dirty, understaffed company without one actual person that you can speak to.I hope they go under and I hope it happens soon.

Taxidriver91
Taxidriver91

Making Square 'illegal' for taxicab drivers in St. Louis is ridiculous. Using Square is fast, simple and safe, and the drivers don't charge an additional $2 for the customer to pay this way. The credit/debit card information is NOT stored in the drivers phone. What IS stored is the date, time, dollar amount and location of where the transaction took place. Being able to send a receipt via text message or email instantly has been great! If a customer wants a paper receipt, the driver can also give them that, in addition to the text or email. I wonder......... early last year the MTC approved using Square in their office to accept payments from drivers but won't let drivers accept payments from customers in the same manner. Who is benefiting here??? And why???

PaleRider
PaleRider

I think it should also be noted that Mayor Slay and County Executive Charlie Dooley passed ordinances adopting the MTC's code in its entirety making the use of Square illegal in St. Louis and St. Louis county. Seems to me that Mayor Slay smiled at Jack Dorsey while stabbing him in the back... OR.. does he even read the ordinances he signs??? Square is a great product, been using it for over two years now.. no problems, no complaints, no discrepancies.... A small note to Director Klein > if a customer has a complaint over a credit card charge, normally that customer would dispute the charge(s) through the credit card company.

gypsiesx6
gypsiesx6

Square Owes us $1000's for almost a year now

Taxidriver91
Taxidriver91

@Jay Smith Whoa!!! Aren't you bitter! Well, fortunately we have been using Square for quite some time now with our passengers and have had ZERO chargebacks, complaints or disputes AND the chances are slim, very slim, that a cab driver would collect $2000 or more in credit card transactions in a week. I understand about the support Square offers and the limitations but again, as of yet... we've had no reason to 'bad mouth' this great product and service. So I say... I hope for their continued success! Go Square!!! One more thing, if an ex-client, as you say, claims goods or services weren't "up to their liking" I suggest that particular business up their game a little bit. The customer is always right you know ;-)

gypsiesx6
gypsiesx6

Yea for the mayor Dorsey needs to be shot in the back head torso ect!!!!! He is a thief!!!

gypsiesx6
gypsiesx6

Just wait you will be screwed by Dorsey and square!!

gypsiesx6
gypsiesx6

Square and Dorsey are thieves read the complaints! They owe thousands of people millions!!!!!

Now Trending

St. Louis Concert Tickets

From the Vault

 

General

Loading...