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Under fire from taxi industry, app developers look to courts, regulators

o Adam Bender
12.12.2012 kl 21:46 | Computerworld Australia

A fight brewing between mobile app developers and the taxi industry could end up in the courts and may result in new regulations, according to independent taxi app developers.


A fight brewing between mobile app developers and the taxi industry could end up in the courts and may result in new regulations, according to independent taxi app developers.

Independent app developers have sought regulatory intervention after the NSW Taxi Council and Crime Stoppers last week launched an ad campaign on buses and the backs of cabs[1] urging consumers to avoid apps that assist users in booking taxis which don't have the Council's approval, such as GoCatch and Ingogo.

The Council represents the taxi industry, while the board of Crime Stoppers includes stakeholders from police and government in each state and territory, the Australian Federal Police and the federal government, citizens and the media.

Ingogo is considering taking legal action against both the Council and Crime Stoppers, protesting the ad campaign as "misleading," said Ingogo CEO Hamish Petrie.

"They've been given an opportunity now to actually respond and do the right thing, and include us as a safe app," Petrie told Computerworld Australia. "But they're obviously not wanting to do that."

Ingogo and GoCatch are separately seeking regulatory help by tapping established relationships with government bodies. The companies, which are competitors, have both received government grants for their apps. Ingogo got a grant from the Commonwealth, while GoCatch received money from the NSW Department of Trade and Investment.

"Before we even launched the business, [Ingogo] met with the minister for Transport's office in New South Wales," Petrie said. "We're actually in regular contact with them, making suggestions about what should be done."

The NSW transport department is "well versed in what we've been doing" and "they've actually been supportive of what we've been doing," he said.

GoCatch has "a pretty open dialogue with the regulator, especially here in New South Wales," said GoCatch CEO, Andrew Campbell. "We anticipate there will be some kind of framework put in place that will better capture the technological changes that are happening in the taxi industry."

"It actually could happen quite soon in New South Wales," Campbell said. Meanwhile, the Victoria state government is having a cabinet meeting this week to discuss an inquiry into competition in the taxi industry, he said.

Ingogo seeks a new licence class laying out rules for mobile apps, Petrie said. The company has implemented safety provisions voluntarily, but requirements would make indie apps more accountable and encourage competition, he said.

Questions about Crime Stoppers sponsorship

For the taxi industry campaign, Crime Stoppers released a list of 10 Sydney apps--mostly affiliated with taxi networks and not including GoCatch or Ingogo--deemed to be safe.

GoCatch and Ingogo have separately reached out to Crime Stoppers to gain approval for their apps, the companies' CEOs said.

"We reached out to Crime Stoppers immediately after their campaign was launched to ask them why they hadn't contacted us before they launched this campaign," Campbell said. "We're scheduling a meeting for the new year, which is the earliest time that they will be available."

Crime Stoppers told Ingogo they could meet in January, but Petrie said he believes that is too late considering the Taxi Council's potentially damaging ad campaign runs during the Christmas and New Year's holiday period.

Petrie said it may have been inappropriate for the NSW Taxi Council to pay Crime Stoppers to sponsor its ad campaign.

"That's a real abuse of their place in the market," he said. "Crime Stoppers is run by the police and has got people from government and the media, and they haven't actually done any proper due diligence on this campaign. They've just gone and accepted the sponsorship money and slapped their stamp on there."

The NSW Taxi Council disagreed with Petrie's assessment.

"The NSW Taxi Council approached Crime Stoppers because of mutual concern--that the booking apps which operate outside the regulations of the taxi industry bypass all the protections and accountability that the laws were designed to offer passengers and drivers," a NSW Taxi Council spokesman said.

"Yes a fee was paid to use the Crime Stoppers logo but that discussion came after Crime Stoppers agreed to approve apps operating within regulatory environment."

Crime Stoppers was contacted for comment.

Developers v. Taxis

"At the basic level, it's about who gets to remove the frictions from the transaction, from the commerce, from the connection of passengers to taxi cabs," said futurist and author Mark Pesce.

"The taxi cab companies of course want to remain in control of that," Pesce said. "But in a world where every taxi cab driver is carrying around a smartphone and every passenger is carrying around a smartphone ... what do you need a dispatcher for?"

"The taxi companies have found themselves quickly, concretely undermined by this technological wave that they were not expecting." In response, the industry will try to use advertising and legislation as tools to "bludgeon" the competition, he said.

The NSW Taxi Council said customer safety is the primary reason for its campaign against independent apps.

"Under the regulations, taxi networks guarantee that passengers receive an accredited driver in a compliant vehicle; that the journey is monitored by security cameras and GPS; that complaints can be investigated and responded to; and that lost property can be tracked," said a spokesman for the Council.

"Every journey is accountable. But outside these regulations, there is no protection, complaints cannot be investigated and there is no accountability on service standards."

However, Pesce disagreed that safety is a problem particular to independent taxi apps. "I don't see the unlicensed apps being fundamentally more open to problems than a licensed app would be."

While they may have a mutual enemy, GoCatch and Ingogo said they have no plans to join forces. Ingogo's Petrie cited different approaches to safety by the two companies as the main reason.

"It was suggested by someone to us" to join forces, but Ingogo wants to "distance ourselves from what GoCatch is doing," said Petrie.

Campbell said GoCatch would continue to add features to the app amid the controversy, and the company plans to announce new functionality tomorrow, he said.

It's likely to be a long and drawn out fight, said Pesce. "Companies do not lose their monopolies easily," he said. "Fundamentally, [the taxi companies] are fighting for their existence."

Keywords: Mobile  
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