Android breaking up taxi monopoly

The former head of Australia's corporate watchdog has identified smartphones and mobile applications as a way to boost competition in the taxi industry, and one cashed-up start-up has developed an Android-based device for drivers.

Professor Allan Fels is heading an inquiry into the Victorian taxi industry and the former chairman of the Australian Competition and Consumer Commission said economists found the technology could be expanded to allow passengers to choose nearby drivers online.

"Smartphone technology allows passengers to see who the drivers are, where their taxis are, what other customers have said about them and how much the fare is," he said at the launch of the inquiry's findings.

The inquiry is expected to take six months, an auspicious period of time in the taxi industry, according to Ingogo founder Hamish Petrie, who said that the last six months has seen a number of opportunities emerge for competitors in the tightly protected market.

Ingogo has developed an Android-based device that only runs a taxi booking application and is being provided free to taxi drivers in a bid to replace the existing terminals.

A key difference with other taxi apps is that Ingogo will only enrol drivers that present a valid driver's licence, taxi driver authority and have completed Ingogo's training, he said.

The company anticipated the backlash against taxi apps by studying the relevant legislation and briefed the government on its plans in order to ensure the system ticks all the boxes.

It has largely avoided the ire of the NSW Taxi Council, which has claimed that apps such as goCatch are unsafe because anyone can pose as a driver.

"That's one of the biggest concerns ... public safety, security and privacy. That's why we've taken this strategy.

"We could release our driver app to market and let anyone apply, but we can't promise the public they're real drivers. You'd get bogus people applying as drivers and ruin your reputation," he said.

"We make sure you're getting a real driver, who is licensed and the authority is still valid, that's important. That's one of the concerns these vested interests will play on."

This opportunity has been enabled by a number of factors including the adoption of smartphones and social media, recent developments in Android operating systems, and the falling price of technology hardware.

"The convergence of these things provides a way to circumvent the monopoly," Petrie said. "Only the last six months that these things have started aligning to pull this off."

"If you look at any industry where a monopoly or near monopoly been operating, it tends to stifle innovation.

"A lot of guys tried to bring payment systems for cabs, different booking systems and just the cost and the effort required to go and make a difference in the industry was a massive barrier to entry. No one was able to punch through that."

He is hoping to be one of the companies that break through and his vision has earned the support of a number of high-profile investors and technology executives, including an MYOB co-founder.

In his corner is also Google APAC Mobile Sales & Operations director Will Easton, a contact that has proved invaluable to the development of the Android-based Ingogo device.

"It's helped, things would take a hell of a bit longer if we haven't."

SWOT

Strength

The start-up has a long-term strategy, hardware-based system, investment from influential players and has taken care to understand legislation.

Weakness

It's the not first to market, so growth could be stifled by driver approval process.

Opportunities

Taxi industry is due for a shake-up. It will be driven by tech.

Threats

Taking on a very powerful monopoly who will surely not go down without a fight. Competition from other apps could all be victorious.

Conclusion

Out of all the taxi apps on the market, this has the best chance of success. It has developed a tangible technology and devised a long-term plan to break up the taxi monopoly. Has the support of nearly every major player (except the taxi industry). Petrie already has runs on the board when he founded Moshtix as a way to disrupt the music ticketing industry.

Verdict: BOOM