Though Uber and Lyft are battling it out for the transport industry’s top car dispatch app, the two tech startups could be threatened by the roll out of city government-sponsored mobile taxi dispatching apps. City Council regulators in Chicago have approved a plan to develop an Uber- or Lyft-like application that would allow users to call for cabs with the touch of a button on a smartphone.
The New York Times reported New York City is considering a similar plan that would allow users to “e-hail” one of New York’s official cabs by phone. No vote has been taken on the plan, which was initially proposed by city councilman Benjamin Kallos, a representative of the Upper East Side and Roosevelt Island. These city-government sponsored apps will also potentially make the entire city’s fleet of taxis available to be used instead of just a portion of them, which is what existing apps in several cities currently do. The taxi app Hailo, for example, doesn't use private cars like Uber or Lyft, and instead uses a small percentage of a city's public taxi fleet, making it difficult for Hailo to compete with Uber.
However, in both Chicago and New York, the development of the new app is an answer to apps like Uber and Lyft that have disrupted the public car transportation industry. In just a few years, the two San Francisco competitor apps have seen significant growth, rolling out fleets of vehicles internationally as well as pioneering ultra-convenient car services. Though there are critics of both companies after some high-profile scandals about safety, user privacy and shady tactics, their significance is in forcing change in the industry is undeniable.
“These reforms represent what is necessary to further modernize this growing industry,” Chicago Mayor Rahm Emanuel said in a statement.