  Taxicabs are a critical aspect of the public transit system in New York City.
The yellow cabs that are ubiquitous in Manhattan are as iconic as the city's
subway system, and in recent years green taxicabs were introduced by the city
to improve taxi service in areas outside of the central business districts and
airports. Approximately 500,000 taxi trips are taken daily, carrying about
800,000 passengers, and not including other livery firms such as Uber, Lyft or
Carmel. Since 2008 yellow taxis have been able to process fare payments with
credit cards, and credits cards are a growing share of total fare payments.
However, the use of credit cards to pay for taxi fares varies widely across
neighborhoods, and there are strong correlations between cash payments for taxi
fares and the presence of unbanked or underbanked populations. These issues are
of concern for policymakers as approximately ten percent of households in the
city are unbanked, and in some neighborhoods the share of unbanked households
is over 50 percent. In this paper we use multiple datasets to explore taxicab
fare payments by neighborhood and examine how access to taxicab services is
associated with use of conventional banking services. There is a clear spatial
dimension to the propensity of riders to pay cash, and we find that both
immigrant status and being 'unbanked' are strong predictors of cash
transactions for taxicabs. These results have implications for local
regulations of the for-hire vehicle industry, particularly in the context of
the rapid growth of services that require credit cards. Without some type of
cash-based payment option taxi services will isolate certain neighborhoods. At
the very least, existing and new providers of transit services must consider
access to mainstream financial products as part of their equity analyses.
