D.C.’s very funny VeriFone contract

Mayor Vincent Gray speaking at last week's press conference on taxi smart meters

The Taxi Link airs on WUST 1120 AM. Listen to the Aug. 25th show here:

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“We’re not doing anything that is not legal,” D.C. Taxicab Commission chairman Ron Linton told TheFightBack at a press conference last week to announce the beginning of the installation of the new taxi smart meter system which will bring credit card readers, GPS tracking and mini-TV screens to the District’s 6,500 cabs. Despite the declaration from Linton, who has a history of making inaccurate statements, courts have yet to determine the legality of VeriFone’s 5-year, $35 million taxi smart meter contract with the taxi commission, which has been in violation of D.C. law for several years running due to its lack of taxi industry representation.

Not that any of this is stopping Linton and D.C. Mayor Vincent Gray from moving ahead at breakneck speed to install the new meters. “We’re on a very tight time table to get this done. It is our intent to have all cabs equipped over the next 90-plus days,” said Gray. The mayor is pushing ahead despite the fact that VeriFone’s backseat ads have proven very unpopular in New York City, and D.C. cabbies have found VeriFone’s equipment to be unreliable, according to Negede Abebe, chairman of The Small Business Association of D.C. Taxicab Drivers. “The system has recurring technical problems,” Abebe testified last week. “We warn DCTC that this problem may cause massive disruption in taxicab service for days at a time.” 

If a driver misses his appointment to have the taxi smart meter installed he may be slapped with a $500 fine, which Abebe called an “excessive penalty.” And if the meters malfunction after January 2013 drivers may have to pick up the tab.  “When the Council chooses to contract [with] one monopolistic vendor instead of setting requirements and standards, it becomes the responsibility of the Commission and the D.C. government to fully cover all costs associated with the smart meter system,” said Abebe.

While drivers may end up paying out out-of-pocket costs for the taxi smart meters, they won’t see any of the revenue generated from the constant advertisements that will play on the mini-TV screens in the backseat of their personal cars. That revenue will instead be captured by VeriFone, with a much smaller portion, roughly 10 percent, going to DCTC, which will see nothing for the first two years.

The mayor’s Wednesday press conference was held at Transco, the garage owned by taxi mogul Jerry Schaeffer who last year attempted to push through a medallion bill that would have put several thousand drivers out of work. Schaeffer stands to benefit from the VeriFone deal as a certified minority contractor for the taxi smart meter system. “I didn’t know he was a minority contractor,” The Taxi Link co-host Tony Norman said of Schaeffer.

The use of minority contractors, or Certified Business Enterprises (CBEs), is not required in the legislation approving the VeriFone deal, which was passed on an emergency basis, an unusual move for such a large contract. The lack of minority contractors has raised concerns for some, including Ward 8 Councilmember Marion Barry, who filed a disapproval resolution putting a 45 day hold on the contract. Wednesday, Gray had harsh words for Barry, saying his hold was ”nonsense.” Gray also announced that ”there will be twelve CBEs” used by VeriFone as part of the taxi smart meter installation process.

Interestingly, DCTC only lists eleven “certified taximeter installation companies” and it’s unlikely all of them are minority owned, unless the CBE requirement is loosely interpreted, as Transco’s inclusion would seem to indicate.

“They were in such a hurry to get the VeriFone contract [completed] they didn’t have any certified businesses involved with it and now all of a sudden we’ve got twelve of them?” asked Norman. “I think Barry is correct in holding this up. There’s a whole lot of serious questions involved with this contract and it needs to have some careful review as well as transparency.” As a result of being passed on an emergency basis, the VeriFone contract hasn’t had a public hearing, which Norman finds problematic. He’s not alone.

Mayor Gray and a VeriFone executive inspect the first D.C. cab to have the taxi smart meter system installed.

“What is the rush for?” asked Mechal Chame, a driver and member of The Small Business Association of DC Taxicab Drivers, the largest D.C. taxi organization and sponsor of The Taxi Link. “What is the emergency of installing this taxi smart meter system within the coming three months?” he asked.

Sitting in his Council office, Barry told TheFightBack why he’s put a hold on part of the contract with the California-based VeriFone. “I don’t believe [in] giving outsiders all this opportunity to make money and serve D.C. without being a part of D.C. Simple as that,” he said. Barry responded to the taxi chair, who’s charged him with trying to make cab drivers pay for installation of the new smart meters, which the administration had previously said would be done at no cost to drivers. “Ron Linton’s gone off the range somewhere. I don’t know what’s happening to him… But I’m confident that Mayor Gray is gonna reign him in,” said Barry.

While Gray has yet to reign in the taxi chair, the courts may. Two of VeriFone’s competitors in the taxi smart meter contract, Creative Mobile Technologies (CMT) of Long Island and TaxiMagic (formerly RideCharge) of Alexandria, have filed protests claiming the procurement process was flawed, and a ruling is expected by Aug. 31. But the District isn’t waiting.

“The Contract Appeals Board has not issued any order that would stay the implementation of this contract so we’re moving on as we said we were going to,” said Gray, who failed to mention the CAB isn’t expected to rule until Aug. 31. Gray’s disrespect for the courts was outdone by Linton, who appeared to take leave of reality. “Everything we’re doing is completely legal. It’s been agreed to by the lawyers on both the protesters’ and our side and the CAB,” he said.

As a result of the District’s unwillingness to await the CAB’s decision, CMT and TaxiMagic have filed a temporary restraining order and Judge Laura Cordero said in court on Friday that she’ll issue a ruling from the bench on Monday.

Also on Monday, The Small Business Association is holding a town hall meeting from 12:30 – 3:30 p.m. at Kedus Gabriel Ethiopian Orthodox Church at 2601 Evarts St., NE.

Related stories:
D.C.’s Illegitimate Taxi Overhaul, May 31, 2012
Taxi chair’s condescension, Aug. 19, 2012

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