The Australian competition watchdog has reversed its stance on a mobile booking and payment app for taxi rides and given it the go-ahead after the app's operators tweaked parts of the service.
Last October the ACCC said it intended to deny authorisation for the "ihail" app, a joint venture between Cabcharge and taxi operators Yellow Cabs, Silver Top Taxi Service, Black and White Cabs, and Suburban Taxis.
At the time the watchdog said the greater convenience on offer to consumers was outweighed by the reduced competition in the industry that would likely result.
The ACCC said the ihail app would quickly become dominant and reduce the viability of third-party booking services like ingogo and goCatch.
But the watchdog today said it had decided to grant conditional approval for the mobile application after the operators made "significant modifications" to the service.
Passengers are now able to pay their fares to the taxi driver, whereas before they were restricted to payment only within the app.
They can also now choose their preferred taxi company during the booking, or go with the nearest available service.
The competition watchdog additionally warned it would allow the app only if ihail's operators "explicitly" informed taxi drivers they were free to use competing booking apps.
"These conditions also prohibit ihail and its shareholder networks from preventing drivers using other booking apps or disadvantaging drivers who do so in preference or in addition to the ihail app," ACCC chairman Rod Sims said in a statement.
“These factors should mitigate the extent of the reduction in competition and associated public detriment due to the competitive advantage ihail will have as a result of its ownership structure."
Ihail will initially be on offer in major metropolitan and regional centres in Australia as well as some overseas cities, the ACCC said.