The ACCC’s decision to deny the launch of the ihail taxi app won’t impact Cabcharge’s booking apps for its Australian taxi brands, says Cabcharge CEO Andrew Skelton.
In a draft determination, the ACCC has ruled that the ihail app could impact taxi prices and quality of service.
Members of the ihail joint venture include Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, Suburban Taxis and Cabcharge (ASX: CAB).
Cabcharge has a 10 per cent investment in ihail and was set to provide the payment gateway for the app.
As well as providing in-taxi payment terminals to most taxis in Australia, the company operates Silver Service and Taxis Combined in Sydney, Newcastle Taxis and 13CABS in Melbourne and Adelaide.
ACCC estimates that the initial ihail shareholders represent more than half of all taxis in Australia, and a larger share in the metropolitan areas where the app would operate.
“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. Depending on the rate of take up of the ihail app amongst other taxi networks, it could potentially grow to include all taxi networks in any area,” said ACCC chairman Rod Sims.
In response, Skelton said the Australian marketplace currently operates with a number of similar apps, including some big global players, which presents “significant competition” in the local market.
“Having mandatory in-app payment is nothing new, and Cabcharge providing the payment gateway for the ihail app is no different to this function being provided by a bank. A number of apps already operate in this way, offering a streamlined experience for the passenger.
“The decision regarding ihail Pty Ltd will not impact Cabcharge’s own booking apps for its Australian taxi brands,” he added.
The ACCC is seeking submissions from ihail and interested parties before making a final decision by December 2015.