The Australian Competition and Consumer Commission (ACCC) has granted conditional authorisation to ihail for three years to launch and operate a new smartphone taxi-booking app, as part of a joint-venture arrangement between taxi networks and other industry participants.
The initial members of the ihail joint venture include Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis, and Cabcharge.
The green light comes after ihail made a number of modifications to its app following the ACCC's draft decision in October 2015 that denied ihail initial authorisation.
The changes to ihail include giving passengers a choice to pay their fare inside the taxi instead of only via the app, and the ability to choose their preferred taxi network based on certain performance information or the nearest available taxi during the booking process.
According to the ACCC, it was previously concerned that given Cabcharge is the exclusive payments provider to ihail, and that ihail initially only wanted passengers to pay their fares in-app, it would have "dampened" any emerging competition between Cabcharge and other taxi payment providers.
However, following the changes that have been made to the app, the ACCC said other payments providers will now have the opportunity to compete in providing services to ihail customers.
Under the conditions of the granted authorisation, the ACCC said ihail will also be required to explicitly inform drivers that they are able to use other taxi-booking apps.
ACCC chairman Rod Sims said the amendments the company has made are likely to result in societal benefits.
"The app will provide an additional platform for passengers to book taxis from a large pool of taxi networks and drivers. The ACCC accepts this is likely to reduce waiting times, particularly in peak periods, which is a benefit to the public," he said.
"The ACCC considers the ownership structure underpinning the ihail app is still likely to allow the participants to quickly establish a larger network of taxi drivers than any other app, and that this initial competitive advantage will not be gained from offering a better product to drivers and passengers, but through ihail's ownership structure alone."
Despite ihail launching as part of a joint venture, other taxi networks will have the opportunity to sign up to the app by opting in to receive ihail bookings over their existing dispatch systems.
The ihail app will initially launch in major metropolitan and regional areas across Australia and some cities overseas.
Cabcharge managing director and CEO Andrew Skelton said he is pleased with the ACCC's willingness to revisit ihail's proposal after previously indicating that it would block it.
"It's encouraging that the ACCC has understood and accepted the dynamic nature of the taxi industry. 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," he said.
The taxi industry has been facing stiff competition in Australian since the arrival of ridesharing app Uber, which was legalised in the Australian Capital Territory and New South Wales last year.
In October, the war between Uber and the taxi industry escalated to a point where two Uber drivers were assaulted.
An Uber spokesperson at the time said: "The taxi lobby and its associates have long used fear, misinformation, and intimidation in its campaign against ridesharing, and it would be a very worrying turn of events if these alleged assaults happened as a result of this campaign."
The companies involved in the ihail joint venture are not the only ones looking to strengthen their competitiveness within the taxi network; taxi app platform GoCatch launched its own ridesharing service, GoCar, to compete directly with Uber in February.
GoCatch CEO Ned Moorfield said the launch of GoCar was in response to the reforms the NSW government made to the point-to-point transport industry at the end of last year, which saw ridesharing services such as Uber recognised as being legal.
GoCar operates alongside GoCatch's existing taxi-booking service, and gives users the option when they launch the app to order a taxi or choose the GoCar option. Similar to the Uber app, users can track when a driver is en-route to their location, and pay the driver via the app by entering and saving their credit card details or linking their PayPal account.
Moorfield at the time rejected the idea that GoCar would take business away from existing taxi drivers using GoCatch, arguing that it will, in fact, bring in more business for them.
"We know ridesharing is going to attract a lot more passengers onto our platform, and a lot of the work will overflow onto taxi drivers. We think taxi drivers on our platform will broadly be a lot busier, and will make more money when they're using GoCatch," he said.
"The other thing is, we're absolutely opening this up to taxi drivers to drive their personal vehicles as ridesharing drivers, and around half of our existing sign ups of GoCar drivers are actually current or ex-taxi drivers. The taxi drivers are taking this model up in large numbers."