The Australian Competition & Consumer Commission (ACCC) has announced that it will not oppose the proposed $6.6 million acquisition by Cabcharge Australia Limited (ASX:CAB) of Mobile Technologies International Pty Ltd (MTI).

MTI is a leading global provider of innovative software to the Taxi industry for the processing, management and distribution of bookings and associated services. MTI has an established presence in North America, Europe, Australia and New Zealand, and is also the owner and operator of Mantax Taxis, the largest network of black cabs in Manchester, England. 

The acquisition provides Cabcharge with an opportunity to expand its customer reach and increases Cabcharge’s ability to compete with other fully integrated personal transport companies.

The ACCC found that it was unlikely that the acquisition would result in Cabcharge supplying inferior dispatch systems or withholding technology features from rival networks.

“Alternative dispatch system providers are available in Australia and the threat of network switching is likely to provide sufficient constraint on Cabcharge,” ACCC Chair Rod Sims said.

The ACCC also investigated concerns that Cabcharge could put rivals at a competitive disadvantage by accessing the dispatch data of competing networks through the MTI system.

“Cabcharge is unlikely to be able to substantially lessen competition through any use of the data. Because of the threat of networks switching to alternative providers, we consider Cabcharge is unlikely to use the data to harm its competitors,” Mr Sims said.

The ACCC also considered whether Cabcharge could harm rival providers of taxi dispatch systems and payment systems by bundling the supply of the MTI dispatch system with its payment terminal.

“It is unlikely that Cabcharge would engage in anti-competitive bundling, as this would risk degrading its payment processing business. Further, drivers generally have another payment terminal available in their vehicles,” Mr Sims said.

Cabcharge CEO Andrew Skelton described the collaboration as a win for Cabcharge’s customers and a win for MTI’s Taxi industry customers. “Working directly with our core dispatch and bookings technology enables us to improve the service experience for a number of key stakeholders. The transaction signals growing confidence in our ability to build and integrate technology and MTI provides an opportunity to be active and competitive on a global scale.” 

MTI Chairman and co-founder Matthew Bellizia added: “I believe this is one of the most exciting developments globally in terms of having Taxi companies compete against the global ride share companies. The shared passion of MTI and Cabcharge and our strong track records are testament to this vision. Our global customer base will get an accelerated set of tools to help them compete in their market places. Together MTI and Cabcharge will invest over $10 million developing technologies to create advanced Taxi dispatch and payment services, which in turn will strengthen operations for our Taxi industry customers across the world.”  

MTI will continue with its existing management structure and operate as a subsidiary of Cabcharge to allow it to provide systems and service to all customers equally and fairly, but with the added support of more people power and R&D funding. Matthew Bellizia will remain as Chairman of MTI.

Transaction completion is expected to occur in the second half of calendar year 2018 and does not include MTI’s meter business. 

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