Cook County Record

Friday, August 23, 2019

Cab fare credit card payment processors illegally charged 50 cent fee, need to pay up, class action says

By Jonathan Bilyk | Feb 23, 2016

A company which processes credit card payments for many of the taxis operating in Chicago could be made to pay back thousands of taxi riders, should a Chicago man succeed in his class action lawsuit against the business over the addition of a 50-cent per ride fee charged since the beginning of the year to passengers paying fares with plastic.

On Feb. 22, plaintiff James Freeman-Hargis, identified in the complaint as a resident of Chicago and a regular customer of taxis in the city, filed suit in Cook County Circuit Court against Taxi Affiliation Services LLC. According to the complaint, Taxi Affiliation Services is a Chicago-based company affiliated with Yellow Group, and “provides numerous services, including credit card processing, to four Chicago taxi affiliations,” including Yellow Cab, American United Cab, Checker Taxi and Blue Diamond Taxi.

In his complaint, Freeman-Hargis said he has since Jan. 1, noticed cab drivers have charged him and others paying cab fares with credit cards a 50 cents per ride surcharge. That surcharge allegedly coincided with the city of Chicago’s decision to reduce the amount of money credit card processors, like Taxi Affiliation Services, could claim from a taxi driver’s fare, from 5 percent of the amount charged to only 4 percent.

The complaint said Taxi Affiliation Services chose to slap on the surcharge “to make up for the reduced revenue,” and did so with no notice to customers, who could only become aware of the new surcharge at the end of the ride when they settled accounts with their driver.

While the city, which regulates cab drivers, their companies and precisely how much taxi drivers can charge, has said it is considering an ordinance allowing the processors to add such a 50 cent surcharge for credit card payments, to date, taxi operators and their affiliated companies have not been authorized by the city to assess such additional fees, the complaint said. Further, the city recently notified cab companies that such fees cannot yet be charged to passengers.

The complaint said plaintiffs believe the fee was not initiated by drivers, but was added by payment processors, like Taxi Affiliation Services, which the complaint said is known to handle credit card payment processing for about one-third of all taxis operated in Chicago.

Freeman-Hargis’ complaint claimed, since the city's ordinances don't permit the fee to be charged, the fee is illegal and violates the Illinois consumer fraud law.

The complaint asked the court to approve a class of other plaintiffs, which could include thousands of others who have used credit cards to pay for cab fares in Chicago since Jan. 1.

The complaint asked the court to award unspecified damages, including statutory damages and all court costs.

The plaintiffs are represented by attorneys with the firm of Wolf Haldenstein Adler Freeman & Herz, of Chicago.

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Organizations in this Story

City of Chicago Wolf Haldenstein Adler Freeman and Herz LLC Yellow Cab Affiliation

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