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To promote safety on college and university campuses nationwide, a Chattanooga, Tenn.-based startup has created a nonreloadable prepaid card designed specifically for taxicab transactions. Other occasions where drinking is common or markets where driver risk is relatively high also could find value in the card, according to the company, Taxi on Demand LLC.
"Oftentimes, a college-age student might have a few too many [drinks] at the local watering hole, and [he] might need a safe ride home, and this card can provide that," says Patrick Konvalinka, director of corporate sales for prepaid card provider TransCard LLC, which is processing the Taxi on Demand transactions.
Though the card can be used for taxis nationwide that accept Discover, marketing efforts will focus specifically on markets where cab use is common, a large university is nearby, and where young adults are starting their careers, according to Dane Bradshaw, Taxi on Demand president and co-owner.
"We originally thought we'd go university by university, but if we do that, we're limiting ourselves," he says.
Currently, Taxi on Demand is concentrating on the east Tennessee area, specifically near the Knoxville campus of the University of Tennessee.
Taxi on Demand does not have an agreement with the university to promote the cards, but it will be present at popular off-campus apartment complexes this Saturday for move-in day, Bradshaw says.
"It's a fine line on what law enforcement and school officials can actually "endorse" as they have strict guidelines on outside business they can support, no matter how good the cause," he says.
Taxi on Demand also expects to market the card outside the college setting. State Farm Insurance Co. has expressed interest in the card, Bradshaw says. "The thinking with a car-insurance company might be if you're a first-time, college-age student driver, here is a Taxi on Demand card if you find yourself in a bad situation [like too many drinks on a night out]," he says.
Corporations also might find a use for the card to track transportation expenses or to ensure employees arrive home safe from a company party or after working late at night at the office, Bradshaw says.
"We'll see where our marketing group leads us, but there is potential in all types of areas," he says.
Consumers may buy the card from the Taxi on Demand Web site or by calling the company's call center. Cards are sold in $35, $50, $100 and $200 denominations, and cardholders may use them only for taxi-related services such as paying fares and tips. There is no PIN-debit brand on the back of the card because the cards only can be used for Discover taxi-cab transactions. TransCard will decline transactions when cardholders attempt to use the card to make another type of purchase. It also charges 50 cents if there are not enough funds in the card account to cover the cost of a cab ride.
"If you try to charge $50 and there is only $35 left on the card, we charge a fee," Konvalinka says. In that situation, Taxi on Demand is encouraging cardholders to pay the remaining balance of the fare with cash.
Additional fees include a 35-cent charge to call the call center to find nearby cabs that accept Taxi on Demand. Card-activation fees vary depending on the denomination purchased, Konvalinka adds. Fees range from $3.95 for a $35 card to $6.95 for a $200 card.
Cardholders also can call a number located on the front of the card to access a list of cabs in the area that accept Discover. Taxi on Demand charges 35 cents to listen to the options.
John Thornton Jr., a former University of Tennessee tennis player, developed the concept for the card two years ago while a student, Bradshaw says. "[Thornton] tells the story about how he used to see students at the bar putting their keys in the ignition when they had no business doing so at the end of the night," he says.
Thornton discussed his idea to create a prepaid taxi card with his father, former University of Tennessee booster John Thornton Sr., and both decided to form Taxi on Demand last summer.
Bradshaw, a former University of Tennessee basketball player, was about to return to Europe to play professional basketball when the Thorntons approached him about forming the company. "They felt it was such a unique opportunity to form a company that had such a great cause to go along with it," Bradshaw says.
But forming the company presented many challenges. All three men knew nothing about the prepaid card industry.
"We had no experience with [a product] we knew could get done," Bradshaw says.
Thornton Sr. had a friend at TransCard, which was receptive to the idea. But until four months ago, Taxi on Demand was still unsure what direction to take.
Some of the ideas discussed involved signing contracts with separate cab companies to accept some form of a prepaid card. Taxi on Demand also toyed with the idea of starting its own cab company.
"When we decided on the card, we had to figure out if going to be reloadable or closed or open-loop," Bradshaw says.
Taxi on Demand credits Discover with making the card a reality. "Discover is the one network that allowed us to do a closed-loop card with the network logo on the front of the card," Bradshaw says.
Discover believed it made the most sense for the card only to work within the taxi cab merchant category because that ties to the card's intended market, Farhan Ahmad, Discover general manager of prepaid and director of emerging markets and strategic business development, wrote in an e-mail message to ATM&Debit News. "Our technology helped Taxi on Demand shape the payments piece of their product," he wrote. ATM
