Drivers call it extortion – forced to pay hotel staff as much as $25 for a single fare from an airport hotel in Burlingame to downtown San Francisco. For longer trips to San Jose or Oakland, the payment can be as high as $40 or $50. If drivers don’t pay, they say hotel staff simply calls a driver who does.
…At the Embassy Suites, in a 10 minute span, cameras caught one front desk employee taking money from drivers on three separate occasions and sticking the cash directly into his wallet. At the Marriott and Hilton, our team observed valet staff accepting money from drivers at the curbside pickup area on multiple occasions.
This is common in other cities too, hotels allow it (despite chain policies) because they can pay their employees less when a job comes with income from third parties.
They see the cab drivers as compensating their doormen, so they pay those employees less. Further, the kickback schemes kelp retain employees, it takes time to cultivate illicit kickbacks from drivers and there would be high switching costs if the doorman was to go to another hotel, they would have to get to know the culture and the other doormen and take time to develop their cab relationships in the new location.
And drivers pay because regulated taxi fares in many cities are set above market clearing prices. Or at least on average pickups of passengers from hotels reduce waiting times, so they are more lucrative at the regulated fare (since fares cannot legally vary by location of pickup in most jurisdictions) than trolling for rides. So it’s worth it to them to do so.
Taxi Cab Lot in Arlington, Virginia
Meanwhile, I’ve observed the practice predominantly at better but not the best hotels, presumably the latter take the view that the practice put their staff at odds with guests and hinders customer relatios. Further, the high end customer service focus likely leads to paying a higher wage and better retention in any case. And in the U.S. the tips are also more likely flowing more freely from the guests themselves, hence the allegiance tends more towards the guest than the cab driver.
Here’s one cab kickback story a driver shared with me while I was staying at the Fairmont Royal York.
There was a long line of cabs in front of the hotel, and Steve was out front calling them over. Now, Steve had a thick accent, asked us where we were going and repeated it to the cab driver. Steve got it wrong, fortunately I told the cabbie where we actually wanted to go and that was no problem.
The driver explained that Steve enforces a $5 kickback on all airport runs, so he always needs to know where you’re going. If a cabbie doesn’t pay the $5 bribe, Steve advises guests against taking a particular cab because ‘they get into lots of accidents.’ The cab driver said that never happens at the Four Seasosn, they don’t accept bribes there, at the Royal York it’s required.
In Santa Monica “the ‘cut’ is about 10% and is referred to as a ‘cookie’.”
I at least appreciate knowing I’m at odds with the doorman rather than the doorman acting as my agent. Maybe this would help:
I’m not a fan of the practice, given the function it plays in hotel employee compensation and retention I’m not sure ‘better enforcement’ of bans will be as strongly pro-consumer as expected.
(HT: Jennifer Billock)