Technology takes on taxi industry with apps

'Tis the season to party! And if you're like many holiday revellers, you'll have a few drinks and then call a cab.

But ask anyone who's tried to track down a taxi on a Friday or Saturday evening in December. It's not always easy.

Now, depending on the city you're in, smartphone users have a few apps to choose from that will help them hail a cab – any day, any time.

in Toronto, Beck Taxi was first out of the gate in May with an app. The cab company says it currently gets 1,500 online orders a day, which is roughly five per cent of its business.

San Francisco-based Uber doesn't own cabs, but it has created an app that allows people to order a licenced driver and even processes payments from GPS-enabled smartphones.

It sounds like a win for customers, but cab companies say they're on the losing end of this deal. "Most definitely, Uber is a threat to us. And actually, it has decreased our business that's out there," said Kulwant Sahota of the Vancouver Taxi Association.

Uber hasn't always had an easy ride. Officials in some cities have issues with the company's business model, which runs into an entrenched industry's long-established rules of play.

In Toronto, the city's Municipal Licensing and Standards division hit Uber with 25 charges for operating an unlicenced limousine business and failing to file a schedule or rates related to its luxury sedan and SUV service, which it has been operating since March.

Uber never applied for a licence to operate a limo or taxi business, which costs $369 for the initial application and $248 each year to renew, according to city officials.

Andrew Macdonald, general manager of Uber's Toronto office, has maintained that the company offers a technology service and is not governed by current bylaws.

"We believe the technology we're offering isn't covered by the current laws in place in Toronto," he told The Financial Post last week. "We do our legal and regulatory homework before going into a city and only launch if we feel that the Uber system is legal under existing regulatory framework. We believe that the court process, if required, will prove this out."

Toronto officials counter that Uber is simply using a different means to arrange service between the public and drivers, and therefore, it needs a licence.

But Macdonald maintains, "We don't own cars. We don't employ drivers. We partner with companies and individuals who are already licenced to provide great service to Torontonians. The technology we're providing isn't covered by the current city of Toronto bylaws."

As for the charge of failing to file a list of rates, Macdonald said Uber users are aware of the costs.

In Vancouver, Uber has raised its rates for luxury car service to at least $75 per trip, a minimum level set by the Passenger Transportation Board of British Columbia. The company is seeking support from its users and fans, asking them to contact elected officials to protest the policy.

Down in Washington, DC, the taxi commission recently proposed new rules that would block Uber's sedan business. And over in New York, the company was forced to shut down a trial taxi service in October.

"Uber isn't afraid. We don't have to cower to regulators and incumbents who don't want us to exist. At the end of the day, we're making cities better... There's a principle to standing up for free enterprise," said company CEO Travis Kalanick.

Another app making headlines in Toronto is Hailo. But unlike Uber, Hailo is licenced with the city. It made waves when drivers from established companies started using its services – in essence, using multiple dispatchers.

"I think it's just change, you know," Hailo Canada president Justin Raymond told Global National correspondent Mike Drolet.

"I think every industry...has to become more efficient. You have to continually improve and the taxi industry is going through that right now."

While Hailo hasn't run into any problems with Toronto officials, there were accusations Beck management warned drivers against using the Hailo app. Beck denies the allegations.

Beck operations manager Kristine Hubbard told Global News, "We have been under attack for a little bit, but I think it's probably because we're the biggest taxi company, and you're going to go after the big guy to make us look like the big bad guy. Competition is good as long as it's fair."

Unlike Uber and Hailo, calls from Beck's app go through the company's existing dispatch system in the order they are received – not to a driver's smartphone.

Follow Mike on Twitter: @MDroletGlobalTV