I don’t often take cabs in Boston, but I did tonight, and en route the driver told me this story, which completely stunned me:
People used to run out of cabs without paying all the time. After ATMs showed up, that hasn’t really happened anymore. So, I have to believe all those people weren’t really dishonest; they just didn’t have the money.
Amazing! Easy access to cash solved an apparently unrelated problem of people shirking their cab payments. This is a Freakonomics moment, for sure.
He speculated further that many of the former shirkers had spent their money at bars, perhaps inadvertently, leaving them with no way home but to risk angering a cab driver.
Of course, the next logical question is how the newly mandated credit card machines in cabs will change the equation. This driver had three concerns. First, the processor takes a 6% cut. Second, it takes weeks to get the money (which is problematic when the driver has to pay cash for the cab and cash for gas). Third, people often leave before the payment clears, sometimes leaving the driver empty-handed.
This bothers me. Whereas market forces can correct the strictly financial problems — by changing rates, or forcing cab companies to negotiate more flexible terms with drivers — the social implications of a technology causing people to unintentionally abandon their debts are less easily remedied.