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Flywheel lets people flag down a cab and still pay via the app

The taxi-hailing app touts old-school cab hailing with new-school cashless payment.

Flywheel's "Pay With Flywheel" feature lets passengers hail a cab on the street and then pay for the ride with the app. Flywheel

Flywheel, the app used by some cab services, is taking customers back to the roots of the taxi business -- letting them flag down any passing cab.

The taxi-hailing app announced a new feature Thursday called "Pay by Flywheel" that lets passengers grab a cab from any street corner and pay for the ride through the app.

"We're giving people the ability to get in and out of a taxi without having to fish for cash or a credit card -- something that's not possible with rideshares," said Flywheel CEO Rakesh Mathur.

Flywheel's service is a bit like popular ride-sharing apps Uber and Lyft, which let passengers hire an on-demand ride and pay automatically through the app. But instead of pairing passengers with drivers who use their own cars, Flywheel partners with taxi companies.

Flywheel is looking to distinguish itself in the hyper-competitive world of ride-hailing, which is dominated by Uber and Lyft. That won't be easy. Uber, the second highest-valued venture-backed company in the world, has raised $5.9 billion in funding. Lyft has raised $862.5 million and Flywheel has raised $34.9 million.

Since Flywheel works directly with taxi services, it could have an edge to counter its deeper pocketed rivals. Cab companies have already hammered out regulatory and insurance policies with city and state officials, while the ride-sharing industry remains in flux. About 100 million cab rides take place in the US each month, Mathur said.

"A unique value exists with taxis, which is the fact that you can walk right into them," Mathur said. Pay by Flywheel is "built to give people the best of both the digital and physical worlds of transportation, so that whether it's most convenient to order a car with your app or hop into a cab in front of you, the whole process is integrated."

Mathur became Flywheel's CEO in November and has since been working to rev up the company's business. The company launched in 2013 and initially operated in just San Francisco. It's since moved into Seattle, Los Angeles, San Diego and Sacramento, Calif. Flywheel is also launching in Portland, Ore., on Thursday.