ihail is no ‘Uber killer’, just a stronger more powerful taxi industry cartel

Finally after a 12 month battle of wits the ACCC has approved the ihail booking app and payment system owned by ihail Pty Ltd, a consortium of Australia’s largest taxi networks and Cabcharge. Following its accreditation the company announced the app will go live in June with 14,000 cars and 42,000 drivers. All great for the cartel, but what’s in it for taxi drivers?

by Peer Lindholdt

How time flies when you’re having fun. It’s hard to believe that it is nearly six years since ingogo and goCatch first launched their smartphone booking apps in Sydney, followed a year later by Uber. The digital revolution of taxi services had arrived.

I wrote in OZ Cabbie at the time that the only way the ‘taxi industry mafia’ would be able to compete with the startups was to copy them and develop an app that could be used by all taxi drivers connected to a traditional network. Now five years later they have, thanks to the ingenuity of MTData, the developer of ihail, and the granting of accreditation to ihail Pty Ltd by the ACCC.

Maybe I should have kept my mouth shut.

Getting accreditation was vital. It allows the company to operate outside Australia’s anti-cartel laws. How brilliant is that?

Originally ihail wanted drivers to be automatically joined up to the app by their network, however, at the behest of the ACCC, you will be allowed to choose whether to opt-in or not, at least in principle.

The genius of the app is that it works through the MTData terminal in your cab rather than on your smartphone, meaning a bigger screen. It also means you can receive bookings directly from your network as well as from ihail on the same screen.

Evidently, when you receive an ihail booking you will also receive the passenger’s phone number, but you have to use your own mobile and key in the number to call him. It’s not clear from the ACCC report whether the passenger can phone you.

At the conclusion of an ihail trip, the driver will be required to enter the value of the fare that is charged to the passenger, ihail only takes the amount that has been entered and will not take price information directly from the meter. I suspect this is to one day enable ihail customers not only to add a ‘tip’ for priority pickup, but also to offer less than the metered fare during off-peak.

In its first submission to the ACCC ihail did apply to have priority tipping included on its app, however it was rejected on the grounds that it would discriminate against people on low incomes. In its final submission that feature was deleted, not because it had to, but because it had received legal advice that the ACCC did not have the power to make that ruling. The same applies to offering a lower than the metered fare on which a fare estimate is based.

As with the third party apps, passengers will be able to rate their driver. ihail has adopted the goCatch system of ‘thumbs up’ or ‘thumbs down’ rather than a star system. You cannot rate your passenger.

ihail also planned to copy Uber’s payment system where passengers downloading the app have no choice but to provide their bank account details so payments can be credited directly into Uber’s account. In ihail’s case that would have been into a Cabcharge account.

That plan was rejected by the ACCC as anti-competitive. As a result, ihail bookings can also be paid by eftpos and cash.

Another condition of ihail’s accreditation is that its affiliated networks ensure that drivers are explicitly informed that they remain free to use any other booking service and not to prevent or disadvantage them from using any other booking service in preference to or in addition to the ihail app. No doubt this has really pissed the cartel off.

ihail Pty Ltd was granted accreditation because the ACCC reached the conclusion that on balance the public benefit it would provide outweighed the public detriment.

ACCC Chairman Rod Sims said the app was “likely to reduce waiting times, particularly in peak period, which is a benefit to the public”, but he acknowledged that the ownership structure allowed ihail to quickly establish a larger network of drivers than any other app, 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”.

I’m sure he knows that’s crap and that most of the ACCC’s rationale for its decision is also crap. Ihail Pty Ltd is an oligarchy whose goal is to get total control of the taxi industry in record time and once that is achieved and ridesharing (minicabs) have been legalised Australia-wide it will likely try to grab control of that market as well. The ihail consortium is big enough, wealthy enough, ruthless and unethical enough to take Uber on at its own game.

With 14,000 taxis, 42,000 drivers and an untold number of regular taxi customers using Cabcharge cards, ihail Pty Ltd will dominate the market from day one, unlike its competitors who started from scratch. The ACCC has given the same mob that controlled Cabcharge when it listed on the stock exchange in 1999 yet another licence to print money. The taxi industry mafia has been running rings around the ACCC for 20 years. Former ACCC chairmen Allan Fels and Graeme Samuel both realised that and became so furious that they jumped at the opportunity to chair the Victorian Government’s taxi industry reforms, presumably as a way to retaliate. Now Mr Sims is repeating history. Unbelievable!

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OZ Cabbie February 2017

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