Summon, the Uber-like cab service formerly known as InstantCab, announced today a proprietary credit card swiper meant to help drivers accept fares from their passengers.
The swiper will be offered to drivers with an introductory processing fee of 0 percent for the first two months of use. Then the fee will jump to 2.5 percent — that’s less than the 2.75% Square charges and much less than many other credit card systems used in taxis which charge up to ten percent. The swiper does not have to be used in conjunction with Summon (which processes card payments through its app like Uber and Lyft), but drivers must “work in good standing with Summon by accepting in-app rides regularly” to continue using the device.
The swiper is Summon’s latest attempt to address some of the concerns drivers and riders have about alternatives to taxis. The company previously announced that it would not use variable surge pricing to increase fares during busy periods and will instead use flat rates meant to keep drivers on the road without thrusting unpredictable fare increases on riders. It is also forming partnerships with health insurance companies to help make sure that drivers receive the medical attention they require with insurance plans offered at discounted rates.
Summon doesn’t directly benefit from offering the swiper to drivers. Again, its app is able to accept payments without the swipe of a credit card. Making it easier for drivers to process payments from riders who don’t use its app is a sign of good will meant to endear Summon to drivers who might otherwise leave the service after a few rides. Its attempts to offer drivers health insurance and remove unpredictable surge pricing from its service are also meant to help it in the long-term, even if they offer few short-term benefits.
That’s fine with Aarjav Trivedi, Summon’s chief executive. “Marketplaces succeed by doing right by both merchants and customers,” he says. “eBay succeeded not just because it offered everything under the sun, but because there were all these people with all of these awesome things in their basement and suddenly they were able to make money off of them.” Trivedi is hoping that keeping drivers and riders happy with the swiper, insurance programs, and lack of surge pricing will allow Summon to distinguish itself in a market filled with ride-calling apps.
Pando weighs in
Sarah Lacy described the problem with unpredictable surge pricing in December:
So now, [Uber CEO Travis Kalanick] seems to think that we simply don’t understand that an algorithm is in charge. No, Travis, we get it. But when you pull up Uber and see a swarm of cars on a day with no extraordinary events and no inclement weather, and then order a car only to get a surge pricing warning for the third time that week, well… you start to wonder what drives that “algorithm.”
For all the shtick that Uber is the poster child for Silicon Valley Libertarian disruption, there is something that strikes me as somewhat un-Silicon Valley about what Uber is doing in the face of so much anger around surge pricing. Google, Facebook, Yahoo, Twitter, Instagram, Snapchat — nearly every great consumer Web company — has focused on serving a need and hooking large numbers of users first, and monetizing second.
Carmel DeAmicis wrote a breakup letter to Lyft after it added surge pricing in February and decided to use plain-old taxis, of all things:
The real perk though: Taxis don’t charge surge pricing. They know how to treat me right. I know you’re going to say that even with Prime Time Tips Lyft is the same cost as a taxi. But I don’t believe you. Even if it is accurate, I don’t want to encourage this behavior in you. I’d rather resort to an old faithful.
The algorithm behind surge pricing is confusing, and I don’t believe it gets more drivers on the road during busy times. If it really evened out supply and demand the way it’s supposed to, then I wouldn’t have surge pricing at 2 PM in Nob Hill on a Saturday. Perhaps surge pricing isn’t the way to fix the unpredictable ebbs and flows of car supply and demand.
[Featured image via Summon]