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New York City puts the brakes on new Uber cab-hailing app

Taxi commission says it has not authorized any apps for summoning taxis or paying for rides for use in city cabs.

New York's taxi commission vetoes Uber's cab-hailing app.
New York's taxi commission vetoes Uber's cab-hailing app.
Declan McCullagh/CNET

A day after private car-summoning service Uber announced it was expanding into the cab-hailing business in New York, the city's Taxi & Limousine Commission issued an industry notice today that it had not authorized any apps for calling for taxis or paying for rides for use in New York City cabs.

"The T.L.C. is eager to pave the way for taxi riders to take advantage of the most up-to-date technology, including smartphone apps that may help passengers locate available taxicabs more quickly," David S. Yassky, the commission's chairman, said in a statement. "However, current contractual agreements between the T.L.C. and payment processors restrict the use of apps."

Those contracts expire in February, and the city began accepting proposals in March for a smartphone-based payment system that will integrate with the commission's existing technology, Yassky said in his statement.

"As part of that process, we will work collaboratively with the livery, black car and taxi industries to address their concerns about the impact of apps on existing business models and to ensure that our rules provide full protection to passengers," Yassky said.

The commission's notice apparently caught Uber CEO Travis Kalanick off guard. Earlier this week, Kalanick announced plans to offer free rides for the first week while it worked with the TLC to resolve a regulatory issue that would prevent the service from processing credit cards to pay for the rides.

CNET has contacted Uber for comment and will update this report when we learn more.

This isn't the first time that roadblocks have materialized for the fast-growing service, which allows customers to us their smartphones to arrange transport in cities such as Boston, Chicago, Los Angeles, New York, Toronto, and Paris.

Last month, Uber Boston received a cease-and-desist letter from the Division of Standards of the Commonwealth of Massachusetts due to a lack of national guidelines for use of GPS location technology in commercial transportation. The service got the green light to resume operations a few days later when Massachusetts Gov. Deval Patrick threw his support behind it.

Uber also clashed with the D.C. Taxicab Commission over proposed legislation that would have required sedan car services like Uber to charge at least five times the minimum fare charged by cabs. That was struck from the legislation before a final vote.