ACCC poised to reject new taxi app

Mr Davies said while ihail wouldn’t have been a “silver bullet”, it would fill a gap in the marketplace, namely that consumers don’t like having to download separate apps for each taxi company when they travel.

“The proposal by ihail would see all payments processed through Cabcharge and a potential return to the monopoly that existed for so long, something recognised by the ACCC as not being in the best interests of the taxi-travelling public”, Mr Petrie said.

He said while the growth in existing apps such as GoCatch and Ingogo was through competition to attract drivers and customers, ihail would achieve a potentially dominant position from launch, not through competition but “because of the larger fleet of taxis its ownership structure delivers”.

Cabcharge Limtied (ASX:CAB) says the ACCC has moved to deny authorisation of a new taxi booking app on the grounds it would have a significant impact on competition. That app is called ihail, and unfortunately for the taxi industry, it has just been struck down by the ACCC over competition concerns.

The ACCC agrees that the ihail system would have made booking a cab way more convenient, but says that it can’t be allowed to proceed for fear of future competition issues.

The Australian Competition and Consumer Commission chairman Rod Sims said with well over 80 per cent of taxis in major metro cities signed up to the app, it was too big a slice of the booking pie.

“There are a number of apps that already provide access to large fleets of taxis across multiple locations”.

Following its expansion into 60 countries in six years, California-based Uber is grappling with heightened regulatory scrutiny and court cases, particularly in Europe where governments have been leery of the company’s impact on the traditional taxi industry. The company is also facing stiff competition from new players in the taxi industry, such as ride sharing service Uber, which are disrupting the heavily regulated sector.

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

Sarah Kaine, an associate professor of business at University of Technology, Sydney, said the regulator’s preliminary finding did not appear to take into account that Uber was now the more dominant force in the market.

“With the arrival of competition in the point-to-point transport industry, choice and opportunity has been opened up to consumers like never before”.

Since the discussion paper was published, Uber had been actively campaigning for users of the service to submit a response to the taskforce, telling the industry it would be “actively involved in this process”.

“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.