Cabcharge, under pressure from ride-sharing services such as Uber, has been cleared to launch ihail, a smartphone taxi booking app.
The consumer watchdog ACCC (Australian Competition and Consumer Commission) has given the okay for a joint venture between taxi networks and other industry participants, including Cabcharge, to operate a smartphone taxi booking app.
The ACCC was initially concerned because Cabcharge was the exclusive provider of payments processing services to ihail and passengers would only have been able to pay for fares through the app.
However, changes made to the app to allow passengers to pay in the taxi means that other payments processing providers are able to compete to provide services.
Cabcharge, whose business is being challenged by new players, posted a 21.7% fall in profit to $24.4 million for the half year to December. It also recently lost its place in the ASX 200 index.
Members of the ihail joint venture are Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis and Cabcharge.
“The app will provide an additional platform for passengers to book taxis from a large pool of taxi networks and drivers,” ACCC chairman Rod Sims said.
“This is likely to reduce waiting times, particularly in peak periods, which is a benefit to the public.”
ihail will face competition from other taxi booking and ride-sharing apps which have established brands and customer bases.
The ACCC has imposed conditions requiring ihail to explicitly inform drivers that they remain free to use competing booking apps.
“These factors should mitigate the extent of the reduction in competition and associated public detriment due to the competitive advantage ihail will have as a result of its ownership structure,” says Sims.
The ihail app will initially operate in major metropolitan and regional centers across Australia and some cities overseas.