Square Disrupts in D.C.

The Washington, D.C., Department of For-Hire Vehicles has tapped leading payment facilitator Square to power an initiative that will move that city’s taxi drivers to a digital platform.

The DFHV regulates the city’s for-hire transportation, which includes taxis, limo services and what the department calls digital dispatch services, which includes companies like Uber and Lyft.

“The for-hire transportation industry has been through disruption with the advent of the e-hailing apps and changing consumer preferences,” Neville Waters, public information officer for the agency, said. “One of the objectives about what we want to do is to allow the traditional taxi to compete more fairly.”

As the program rolls out, the city’s taxi drivers will switch to meter apps that will enable passengers to specify a tip, pay, and receive an electronic receipt after the ride.

“By integrating with Square’s APIs, developers can access our hardware, payments, and financial services with just a few lines of code,” a Square spokesperson said. “By building custom apps on top of Square’s platform, developers can connect with our latest reader that accepts chip cards and contactless payments, like Apple Pay and Android Pay, and process any form of payment.”

The digital meters will enable dynamic pricing – for example, the ability to offer discounted pricing for frequent passengers – although drivers will not be allowed to raise their prices above posted rate ceilings.

The agency is also working with developers to deliver other features, such as driver ratings and GPS tracking, the Square spokesperson said.

According to Waters, this connection to developers is a key benefit of the digital transition.

The partnership with Square is part of an effort in which the agency is seeking to leverage technology to improve the availability of safe, affordable transportation for residents of the city, he said.

“The legacy hardwired taxi meter has not changed, essentially, since its initial introduction into service. Now, there are cheaper means of being able to process payments, identify location, interact with customers and ensure seamless payment processing, making the experience better for consumers,” Waters said.

Particularly for an agency in charge of regulating an industry’s activities, access to data is another real asset of the digital system, Waters said.

The real-time data can provide the agency with information on where additional vehicles should be deployed, for example, improving the agency’s efficiency in providing transportation options to consumers.

“In our role, we want to know what’s going on so that we can create policies and programs and develop pilots that really respond to what’s going on in the marketplace,” he said. “The only way we can do that is to have good data, review it, analyze it, and be smart about it, so it’s not just based on opinion.”

Waters said that Square’s existing reputation among both merchants and consumers made it a logical choice for the agency’s payments partner.

Part of the purpose of moving to a digital platform is reducing the cost for taxi drivers to do business, he said. Acquiring the necessary equipment to manage fares can add up to be significant.

“The Square technology allows people who may not have been able to enter into a commercial enterprise before have the flexibility, the mobility, to be able to process payments and provide goods and services for the public,” he said. “Again, that goes back to reinforcing our objective, which is providing consumers with appealing choices that are safe and convenient.”

The department has mandated that taxi drivers adopt the digital platform by August 31.