ACCC approves ihail taxi venture

The ACCC has granted conditional approval to a joint venture between Cabcharge and four taxi networks to launch and operate a new taxi booking smartphone app.

The venture, ihail, plans to produce an app that will allow users to book the nearest accessible licensed taxi from any network signed up to the booking service. It will be offered nationwide as well as at international destinations.

The ihail app will also give users the option to pay for the trip though their app, in an apparent attempt to help the taxi industry more effectively compete against Uber.

As well as Cabcharge, Yellow Cabs, Silver Top Taxi Service, Black and White Cabs and Suburban Taxis are all participating in the joint venture.

The ACCC said that after it issued a draft decision proposing to deny approval, ihail made a number of major modifications to the app, including giving customers a choice to pay the fare in the taxi and the ability to choose a preferred taxi network based on performance information.

ACCC chairman Rod Sims said the ACCC still considers that the ownership structure will quickly allow ihail to establish a larger network of drivers than any other app, a competitive advantage gained purely through this structure.

“However, the ACCC considers that ihail will still face competition from other taxi booking apps and ridesharing apps which have established brands and customer bases. There is also nothing in the arrangements preventing drivers using other booking apps,” he said.

The ACCC has nevertheless imposed conditions including requiring ihail to explicitly inform drivers that they have the option to use competing booking apps and prohibiting ihail and its shareholder taxi networks from disadvantaging drivers who choose to do so.

Andrew Skelton, CEO of Cabcharge — which provides in-taxi payment services to most taxis in Australia and operates its own taxi networks in four capitals — welcomed the decision.

“This is good news for passengers and drivers, but it’s disappointing that it has taken so long,” he said.

“After previously indicating they would block the proposal, the ACCC has made the right decision today and we’re relieved that ihail will be given the opportunity to participate in the marketplace.”

Image courtesy of Jes under CC