Cabcharge booking app denied by ACCC

The app sources the nearest cab, regardless of network, in the same way Uber in Sydney uses taxi drivers signed up for its ride-sharing app. It also lets passengers to offer to pay extra when requesting a taxi to entice drivers to take the job.

But the app looks set for a rocky path after the ACCC revealed in a draft determination it was concerned the technology would have “a significant impact on competition in the taxi industry”.

“This would guarantee that from its launch, the ihail app would have a larger fleet of taxis, in a broader range of locations, than any existing taxi booking apps”, ACCC chairman Rod Sims said.

Australia’s consumer watchdog says it will block a taxi-hailing smartphone app proposal from major taxi companies because it will reduce competition and “produce significant public detriments”.

Cabcharge, which owns 10 per cent of ihail, said that the mandatory in-app payment was nothing new and its provision of the service was no different to the function being provided by a bank.

Mr Sims said the ihail app would achieve a potentially dominant position from its launch, “not through competition, but because of the larger fleet of taxis its ownership structure delivers”.

In June, the ACCC approved a court-enforceable undertaking from Cabcharge Australia to allow third parties to process Cabcharge cards.

While the app would have made booking taxis more convenient for passengers, it would have been “too big a cost to competition”, Mr. Sims said.

But a key sticking point for the ACCC was ihail’s requirement that all payments be handled by Cabcharge.

Cabcharge recently logged a 17 per cent decline in fiscal 2015 profit after new laws limiting taxi service fees impacted on the payment firm’s bottom line.

There are also business interests ‘from Huston and Minneapolis in the United States, ‘ although this USA involvement is not further explained, at least in this statement.

The app is already available is five countries, France and Canada being the major ones, and charges the associated taxi companies a slight commission on the fares they take.

“We understand the debate going on about Uber and appropriate regulations of taxis, but that’s very much for state regulators to deal with”.

“It does nothing to create a fair and level playing field for taxi services in the respect that Uber operates”, he said.

The taskforce published its submissions at the weekend, and, after months of campaigning by Uber, the San Francisco-based startup declared the support a win.

“We know that it’s imperative we get payments in apps to the market in the current half”, he said at the time.

On its blog, Uber also embedded a map for Sydneysiders to contact their local member of parliament in a bid to show their support for the startup on NSW streets.