Taxi owners sue city over credit card machine rules

The main complaint in the suit, filed last week in Suffolk Superior Court, is that Boston taxis are not allowed to operate when a credit card machine is not working, according to rules set by the Police Department’s hackney carriage unit, which regulates the taxi industry.

In Boston, the meters and machines are connected through a satellite, so when the machine goes down, so does the meter. In New York, by contrast, owners whose machines are not hooked up to satellites have 48 hours to get a credit card reader fixed before they are prohibited from operating cabs, according to the New York Taxi Workers Alliance.

“From my understanding, the places that do the repair are open for regular business hours, Monday through Friday,’’ said lawyer Marc Estrich, who is representing the owners association. That means that if a machine malfunctions on a Friday evening and it cannot be fixed until Monday morning, an entire weekend of income could be lost.

A City of Boston spokesman declined to comment yesterday because the city had not been served with the suit.

The taxi owners’ suit also claims that the Bank of America accounts that certain taxi owners and drivers had to open in order to collect fares paid by credit card require them to reveal their social security numbers — an “impermissible violation of privacy rights,’’ according to the suit. The taxi owners also take issue with the fact that they have to wait several days to access credit card revenue, and that they have to pay a 5 to 6 percent processing fee on every credit card transaction, according to the suit.

“The 6 percent is absolutely outrageous,’’ said Arthur Rose, a Boston cabdriver. “It’s three times what anybody else pays.’’

Credit card machines have been mandatory in Boston cabs since Jan. 1, 2009. The goal of the suit is to get the policies changed, Estrich said, because there were no hearings before the regulations were put in place. The owners and drivers want to negotiate with the city’s hackney unit about getting more time to operate the cabs when a credit card machine goes down and about having more credit card companies to choose from.

If the Police Department will sit down with the owners, they’ll drop the suit, Estrich said. “This is a last resort.’’

The Boston Area Taxi Drivers Association also has issues with the credit card machines. The group has appealed to the Police Department and plans to take its case to the Boston City Council.

Last year, the Boston Taxi Owners Association successfully sued the city to block the requirement that all the cabs in the city had to be energy-efficient hybrids by 2015. The organization said the new vehicles were too expensive and would threaten their livelihoods.

Katie Johnston Chase can be reached at johnstonchase@globe.com.