A taxi war is erupting in Toronto, and cab drivers say they’re caught in the crossfire.

Barely two months after becoming the city’s only licensed cab company based solely on a smartphone application, Hailo Toronto is hurling accusations at chief rival and industry heavyweight Beck Taxi. President Justin Raymond alleges the biggest player in Toronto’s cab scene is breaking a city bylaw by threatening to discipline drivers that use the upstart Hailo’s app to find fares. The city has confirmed it is investigating complaints.

Beck Taxi managing director Kristine Hubbard denied that her company has threatened to discipline drivers. Instead, she said the company has been “educating” cabbies to see that it’s inappropriate for Beck-branded taxis use another company’s dispatch system.

“Maybe there’s been a misinterpretation,” she said. “When you’re in a Beck Taxi, the service being offered through the Beck Taxi radios are for Beck taxis … You work for one company or you work for another.”

Raymond disagrees, pointing out that taxi drivers are technically akin to independent contractors. There are no bylaws to prohibit them from finding fares using multiple dispatch systems.

“We’ve had drivers come into our office almost in tears because they’re so afraid of what Beck is saying,” said Raymond. “They’re threatening to take shifts away, discipline them, suspend them from using the radio, threatening to call the garages where they pick up the cars … It’s disgusting.”

In a letter sent to the city on Oct. 18, Raymond detailed Hailo’s allegations that Beck Taxi is trying to intimidate drivers out of using the new company’s app. According to the Toronto Municipal Code licensing bylaw, no taxi broker can prevent drivers from accepting calls for service on their “normally used” phones.

Raymond provided photos of a Beck driver’s pager that display a message allegedly from a Beck manager informing the driver he is being disciplined for using the Hailo app. He didn’t want to be named for fear of repercussions. Raymond said the driver, who claims to have been suspended from Beck’s dispatch system for 24 hours, is “working up the courage” to file a complaint with the city. Hailo and at least one driver have already done so.

“It is safe to say that this new way of obtaining taxi service is causing some ripples in the established order of things,” said Bruce Robertson, director of licensing in the city’s municipal licensing and standards division. He confirmed the city is following up on complaints.

Last week, another Beck driver came to the Hailo office and said he had just been threatened with suspension by a Beck manager who learned he was using the Hailo app.

The 36-year-old driver, who makes between $2,000 and $2,400 per month and didn’t want to be named out of fear of retaliation from Beck, said his manager told him that if he kept using the app he would call “every garage in Toronto” so he wouldn’t be able to rent a taxi for work.

“I have a family to feed. I don’t want anything to happen between me and Beck. These guys, they can do anything to me. They’re a big company,” he said, adding that he has submitted an official complaint to the city.

Gerry Manley, a cab driver for 40 years who also managed brokerage Able-Atlantic Taxi in the early 1990s, said he’s received “dozens of phone calls” from Beck Taxi drivers who say the company is threatening to force people to leave the brokerage if they use the Hailo app.

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He thinks Beck Taxi and other traditional companies are uneasy about this new technology, which could eliminate drivers’ need for a central dispatch centre.

“War between the old established Toronto taxi brokerages and the new taxi phone apps has officially begun,” Manley wrote in a letter to the city detailing the situation. “The taxi driver is caught right in the middle of this war and has done nothing wrong.”