Hailing a cab during busy periods is set to become easier after the competition watchdog decided to allow a new smartphone taxi booking app called “ihail”.
The Australian Competition and Consumer Commission has given the all-clear for the app, which the taxi industry hopes will help it better compete with ride-sharing service Uber.
The ACCC was initially opposed to the taxi industry setting up ihail but has changed its mind following significant modifications to the app.
The changes include giving passengers the choice of paying their fare in the taxi rather than just via the app.
Passengers can now also choose their preferred taxi network during the booking process, or select the nearest available taxi from any network.
“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 on Tuesday.
“The ACCC accepts this is likely to reduce waiting times, particularly in peak periods, which is a benefit to the public.”
The initial members of ihail include Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis and Cabcharge.
Other taxi networks can also sign up.
The ACCC said the ownership structure on which the ihail app is based would allow the participants to quickly establish a larger network of taxi drivers than any other app.
Nonetheless, ihail would still face competition from other taxi-booking apps and ride-sharing apps.
Drivers could also use other booking apps, and ihail must tell drivers that they can do so.
“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,” Mr Sims said.
When the ACCC issued a draft decision on ihail in October 2015, it said it may block the release of ihail given its impact on competition and Cabcharge’s role in handling payments.
Taxi representatives subsequently accused the ACCC of protecting Uber.
The ACCC was initially concerned that competition between Cabcharge and other payments processors may have been lessened because originally, passengers would have to pay through ihail, with Cabcharge as the exclusive payments processor.
But now that passengers can pay in the taxi means other payments processors can compete to provide services to ihail customers.
Cabcharge, which has a stake of about 10 per cent in ihail, welcomed the ACCC’s decision.
“It’s encouraging that the ACCC has understood and accepted the dynamic nature of the taxi industry,” Cabcharge chief executive Andrew Skelton said.
“We believe the authorisation will enhance competition in the local market which in recent times seems to have all but been reserved for players outside the traditional taxi industry.”