VeriFone has begun outfitting on-board payments systems on New York City's new street-hail livery cars.

The bright green cars are the latest addition to New York's expansive (and often confusing) taxi and livery car industry, and are licensed to pick up street hails in the northern section of Manhattan and the city's four other boroughs (the Bronx, Brooklyn, Queens and Staten Island).

Traditionally, only New York's iconic yellow cabs are allowed to pick up street hails, while livery cars (typically black town cars) exclusively serve prearranged rides. But demand for yellow cabs is so great in Manhattan that it's often difficult to find rides in the outer boroughs and as a result, many livery cars pick up street hails, despite the practice being illegal.

The new class of for-hire vehicles began hitting streets last week, outfitted with integrated hardware and software systems that include a card reader, GPS unit and driver and passenger information screens. The systems are similar to the in-car payments hardware installed in 7,000 of New York's yellow cabs, San Jose, Calif.-based VeriFone says in a press release.

The New York City Taxi and Limousine Commission will issue 6,000 SHL permits per year for the next three years. In July, it licensed VeriFone and New York City-based Creative Mobile Technologies (which uses hardware built by Ingenico) to sell the payments systems for the new cars. The two companies are also the only providers licensed by the TLC to sell in-car point of sale systems to yellow taxis.

The new class of cars is coming online just months after the TLC began testing apps that let consumers arrange a ride from a yellow taxi using approved smartphone apps. The program has faced a series of legal hurdles from the livery car industry, as well as technical issues related to the payments functionality of the apps.

The pilot was originally designed to give passengers the ability to pay for rides with their phones, but so far, none of the three e-hail app providers offer the capability. While apps like Uber, Hailo and Taxi Magic all have the ability to make mobile payments, the developers must integrate their apps with VeriFone and CMT's on-board payments systems. But there is little incentive for the in-car terminal vendors to integrate with the apps, since they also handle payment processing for the cabs and would stand to lose revenue from taxi fares paid with the mobile apps.

Yellow taxi drivers seem to like the apps because they give them a better shot at picking up passengers on their way back from trips that take them out of Manhattan, according to local news reports. But only 20,000 of 117,000 e-hails (17%) were successful in connecting a passenger with a ride, and e-hail trips accounted for less than one-quarter of 1% of all yellow taxi rides during June, the first month of the e-hail pilot.

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