The experiment, should it become a reality, would involve a special Square-built payment terminal on tablets in the back of 50 taxicabs to start, as well as a Square application that would process riders’ credit card payments. And the swap-out — and the stakes — would go beyond just hardware.

If tablets running Square were to supplant some of the existing technology in the back of New York City cabs — currently supplied by Creative Mobile Technologies LLC and VeriFone Systems Inc., one of the world’s largest electronic payment companies — fee structure and revenue from “Taxi TV” content would also come into question. (It’s important to note that the New York TLC hasn’t formally submitted the Square proposal to its board of commissioners yet; it plans to do so on March 1.)

Of the 13,237 official taxicabs currently on the road in New York City, VeriFone processes the credit card payments in approximately half of them; CMT handles the other half. The two companies were awarded the contracts in the summer of 2007, after the Commission had put out a challenge seeking innovative tech and electronic data tracking for taxicabs; by November 2008, the technology had been fully implemented in all cabs.

The systems currently use cellular data to power the transactions, which is also technically possible through an iPad or another type of tablet device. In addition to the payments technology, current systems provide automated dispatch capabilities, GPS, computerized trip logging and text messaging — also functions that a tablet could likely provide.

So hardware aside, consider the content on the Taxi TV’s. Those loops of news updates, late-night talk show clips and dining guides that cab riders see on the backseat TVs are the result of a partnerships that VeriFone and CMT have forged with TV networks (though the TLC commands 20 percent of the screen time on the primary channel for public service announcements). VeriFone has rolled out NBC content in 12,000 cabs across the U.S.

While we know that content can stream quite nicely on tablet devices, too — and likely provide an even slicker viewing experience — the companies are making money off of back-of-cab media and would lose that if they lost control of the screen. At the same time, more gaming and social networking options are being proposed for the back of cabs, which would provide potential ad revenue streams.

But ultimately the real sticking point could be fees. It’s unclear what a new payment structure would look like, but David S. Yassky, the chairman of the Taxi and Limousine Commission, has been quoted as saying he hopes credit card transaction fees could be lowered.

The TLC Web site currently says that cab owners can expect credit card and debit fees to average 3.5 to 4 percent, whereas Square charges its small-business users 2.75 percent per transaction without additional interchange fees. If Square offers taxi cab medallion owners — who also pay for the installation of the technology up front — a lower fee option on credit card transactions, the way it does for small businesses that shy away from investing in bulkier credit card systems, Square could have a leg up on its rivals.

And those rivals are unlikely to remain quiet.

Verifone has previously taken direct aim at San Francisco-based Square for what it alleged was a security flaw, saying that Square lacked the ability to properly encrypt data. (Square’s Dorsey quickly responded by saying that credit cards are inherently not secure, but that Square continually reviews, verifies, and stands behind the protections that it has put into place in its credit card reading device.)

For now, the San Jose-based payments giant isn’t offering a formal response to the new taxi cab proposal. A spokesman for VeriFone would say only that the company is not going to comment on a proposal nobody has seen yet.

According to the New York Times, Creative Mobile Technologies has also raised concerns about the security of Square’s technology and has previously requested that the vote on the proposal be delayed.

But if the proposal were approved next month, the pilot program using Square on tablets could kick off “within a month or two,” according to Allan Fromberg, a spokesperson for the TLC.

And that’s when things will get interesting in the back of taxicabs.

(Photo courtesy of Flickr/JosiSilva)

But despite the fact that some customers were dismayed, Uber isn’t throwing in the towel on dynamic pricing. In fact, the company, which is usually very transparent about its surge pricing plans, is considering whether to raise fares regularly on weekends.

Could this be a Netflix-like moment for small start-up Uber, just as it’s trying to grow?

You’re probably thinking, and rightly so, that Netflix and Uber are two very different companies: Netflix is a 14-year-old public company that faces tough competition in a growing premium video-streaming market; as of the quarter ending Sept. 30, it had around 24 million subscribers. Uber is a 1-and-a-half-year-old start-up using a mobile phone application to create a marketplace that connects consumers with a limited number of town-car drivers. Netflix is available in the U.S., Canada and 43 countries in Latin America and the Caribbean; Uber currently operates in six U.S. cities and in Paris. Subscribers pay a monthly fee to Netflix; Uber users pay per ride.

But Netflix provides a recent example of price adjustments that resulted in negative consumer reaction, to put it mildly. The company said last July that it was eliminating the option to combine DVD and streaming video services, and in doing so, hiked the price by 60 percent for consumers who wanted both options. Netflix’s stock plunged; the company later cut its guidance by one million subscribers, and eventually reversed its plans to offer a DVD-only service.

As Uber has explained a few times now, the sticker shock some customers experienced on New Year’s Eve was the result of surge pricing, which Uber has started putting into effect on nights when drivers might be busier than usual. Travis Kalanick, Uber’s founder and CEO, has pointed out that if Uber doesn’t make it worth its drivers’ while to be on the platform, there won’t be any drivers available.

When it comes to tech products and services, users often don’t react well to change — at first. Professionals and consumers alike become accustomed to a product, and some initially see change as disruptive to their productivity or proficiency in that tool. There’s also often a backlash when the change results in a threat — real or perceived — to privacy, as we’ve seen with reactions to Facebook’s ever-evolving settings.

But when the change ultimately costs users or subscribers something they can peg a dollar amount to — such as the Netflix price change, or as with last week’s Verizon Wireless convenience fee — the options being weighed become that much clearer for the consumer.

In other words: Should I stay, or should I go now?

Uber does not have to worry about shareholders, or FCC scrutiny. The number of complaints logged — 97 disgruntled users and 15 whose Uber apps on their smartphones might not have been working correctly — was a small percentage of the thousands of Uber rides that were booked on New Year’s Eve. It could be said that this is more of an Airbnb moment than a Netflix moment for Uber: A case of a small start-up needing to do a little damage control.

From a business perspective, Kalanick says, New Year’s Eve was still a success. Early-stage Uber investor Jason Calacanis tweeted that he “loves” Uber’s surge pricing, as it ensures availability. (Calacanis did not immediately respond to AllThingsD’s request for comment on his tweet.)

Love uber’s surge pricing as it helps drivers & ensures availability. 5x 3 days a year is ok by me. #angelinvestment http://t.co/v2XuLT80

January 1, 2012 6:44 pm via Tweet ButtonReplyRetweetFavorite

@Jason

Jason Calacanis

Another regular Uber user, SproutSocial CEO Justyn Howard, said he used Uber on New Year’s Eve, and noted that his car ride didn’t seem any different than usual. He said he believes Uber is especially good with data-driven strategy, and that supply-and-demand management will become easier for Uber over time. “Overall, I expect the feedback and data gathered from NYE will be put to good use,” Howard said.

Uber is currently refunding some unhappy customers, on a case-by-case basis.

But for Uber, and many other start-up companies, reaching the average consumer will be critical if it wants to grow into a bigger company. By working with town-car companies and not taxis — as some other app platforms do — and charging a $7 to $8 base fare for rides, Uber is already a company that delivers a premium service that not everyone can afford.

If Uber institutes dynamic pricing on regular weekend nights, the company could solve the problem of ensuring there are enough drivers willing to opt in to Uber’s app platform, but at the risk of losing out on customers that aren’t willing to pay two times or more the standard fare.

The tech-savvy crowd, after the initial sticker shock, might accept this.

The “normals,” however, will likely stand outside a little longer hailing taxi cabs — or find other means of getting around town.

(Image courtesy of Flickr/McSmith86)

Complaints arose on Twitter about the high price of Uber car rides due to so-called surge prices that were put into effect across multiple cities. One user, a San Francisco-based entrepreneur named Brendan Mulligan, described in a blog post how a two-minute, half-mile Uber ride cost him $75. He also offered some tips for improving the app.

Here’s a sampling of complaints from irate Uber customers on Twitter:

Got charged $150 for 2.4 mile ride from @Uber last night.

January 1, 2012 6:08 pm via webReplyRetweetFavorite

@peternudo

Peter Nudo

While I’m glad I’m home safely, the $107 charge for my @Uber to drive 1.5 miles last night seems insanely excessive. :(

January 1, 2012 10:46 am via Tweetbot for iPhoneReplyRetweetFavorite

@Aubs

Aubrey Sabala

A total of 97 complaints have been logged since Saturday night about surge pricing, Uber says. That does not include the 15 users the company believes may not have gotten the surge-pricing notifications through their apps when requesting cars. The company declined to say exactly how many customers requested cars via Uber on Saturday night, but founder and CEO Travis Kalanick says the total number of rides was in the five figures. Overall, he says, the evening was a success despite the complaints.

The company is reversing charges for some unhappy customers on a “case by case basis,” Kalanick says.

Uber, which launched in 2010, currently dispatches car services in seven cities, including San Francisco, New York, Washington, D.C. and Paris.

Uber doesn’t dispatch its own cars, but acts as a marketplace through which users can connect with drivers. Kalanick says the surge pricing is to ensure there are drivers available for Uber customers, since those drivers could theoretically make money elsewhere during holidays and other high-demand days.

Since Uber doesn’t dispatch taxi cabs, rates are generally higher than regular cab rides to begin with. Users get a direct-dial option for calling the driver as he or she approaches them, and the cars that arrive are usually high-end town cars. Uber rides also include a base fare of between $7 and $8 depending on the city, and the tip is automatically factored into the final price per ride.

The company has been known to put surge pricing into effect on nights when it anticipates demand to outpace the supply of car services available. The company did this on New Year’s Eve last year, and also on Halloween. When prices are about to surge, Uber sends a mass email out to its users, puts up a blog post detailing the pricing changes, and, barring technical issues, users should also get notifications through the app during times that surge pricing is in effect.

Dynamic pricing — especially when it comes to the travel industry — is not a new concept. Kalanick says Uber faces a unique challenge when it comes to changing expectations that come with decades of fixed pricing in car transportation.

“If you look at a club that charges a $20 cover on a normal night and then charges $100 on New Year’s Eve — that’s just what happens,” he told me. “But with Uber, we understand there are some people who feel the pain of that transition and we take some responsibility for making it as smooth a transition as possible.”

He said the company will still put variable pricing into effect during holidays in the future, and is currently considering whether to do the same during weekend nights.

Well, here’s a photo that was forwarded to me showing an advertisement on top of a taxi in Manhattan of a goodbye message from Bing, as well as GE (GE) entertainment unit NBC, to the late pop legend, Michael Jackson.

It was a joint effort from Bing and NBC, said a Microsoft source. The software giant and NBC have a strong partnership surrounding the launch the search service.

Done by Show Media, which specializes in this form of advertising, the text–with a picture from Jackson’s “Thriller” album–reads: “We will miss you Michael.”

Presumably, enough of a condolence to get fans to search about him on Bing–instead of on Google (GOOG) or Yahoo (YHOO)–and get news updates from NBC’s many media outlets.

Jackson’s sudden death last week caused a massive surge of activity all over the Web, including at search engines.

Here’s the taxi-topper image (click on it to make it larger):

Sure, fabled magazine publisher Condé Nast has been forced to shutter magazines and trim its staff. But now you know things have really gotten dire: It’s cutting back on cars.

The New York Post’s Keith Kelly says that top Condé editors are eschewing the use of chauffeured autos to make their way across Manhattan and beyond.  Hailing a taxi or even–gasp–riding the subway are as symbolic as it gets at Condé, where the use of a car was considered a birthright, even for mid-level employees.

Alas, symbolism is unlikely to suffice at Condé, where CEO Chuck Townsend has already announced that the company will need to tighten its belt again this spring; Condé is reportedly gearing up for another round of layoffs.

Meanwhile, other New York publishers who never doled out that much largesse to begin with are probably going to make another round of cuts themselves this spring.

Here is BoomTown’s first video from the Consumer Electronics Show in Las Vegas, which kicked off last night with a keynote speech by Microsoft (MSFT) CEO Steve Ballmer.

So far, it’s been a definitely thinner crowd, a reflection of the weaker economy, with more taxis in line than lines for taxis.

But CES is still a reliably noisy, often pointless, gadget cavalcade–with introduction of a new smartphone from Palm (PALM), called Pre, as the highlight so far.

Here’s some chit-chatting with attendees and looking at some products, including a guy who looks like a member of ZZ Top, showing off a new music device from Disney (DIS):