Mobile apps scored a small but significant victory last week, one that will likely have repercussions for mobile payments in general.

The New York City Taxi and Limousine Commission announced that its Board of Commissioners has passed a pilot program that will let passengers use "e-hail" apps such as Uber to flag down the city's yellow cabs. This is a big deal for Uber and other app-makers, as the TLC previously had blocked such apps. Now, they'll be allowed to provide an option not only for calling a cab, but also for paying for rides safely and securely.

"This is an exciting day for taxi riders," said TLC Commissioner and Chairman David Yassky. "It's the TLC's job to represent passengers, and when new technology comes along, we want to make sure it's available to them. New York City is known for embracing innovation, and we've certainly done that today."

The program will go into effect after February 15, 2013, and will require developers to meet certain guidelines meant to protect passengers from being overcharged, and to guarantee that one of New York's 200,000 licensed yellow cabs is providing the service.

Additionally, the program will allow passengers to hail a cab only within a half-mile, while in Manhattan's central business district south of 59th Street from east side to west side, or within a mile-and-a-half anywhere else within the city.

The program will be evaluated quarterly during the first year to assess results of the rule change and determine whether it will become permanent.

Uber's reaction to the news was, not surprisingly, positive. On the Uber company blog, CEO Travis Kalanick called the decision a victory and predicted the pilot will prove a success.

"We already know how this pilot will turn out," Kalanick said. "As you may remember, New York City's first experiment in e-hailing yellow cabs was only a couple months ago. Along with quite a bit of controversy there was enormous, unprecedented demand from New Yorkers who used it to get a yellow cab dispatched to them for the first time in decades."

Kalanick said it wasn't just a win for riders either. Drivers who found themselves in neighborhoods far from midtown Manhattan were finding riders they never had before as well as earning hundreds of dollars a week more than before," Kalanick said.

The news of the TLC decision follows a similar decision by the Washington, D.C., city council to allow Uber to operate in that city. The contretemps between Uber and D.C.'s council was one of the first of the company's fights with recalcitrant municipal governments. (See more on Mobile Payments Today's coverage of how Uber's fight reflects similar issues faced by other mobile payment companies.)

For more stories like this, visit the in-app payments research center.

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