If that sounds more like ride-hailing, that is exactly the idea.

“We want to give them an opportunity to be able to retain and add customers, to be innovative and nimble,” said Jarvis Murray, an administrator with the city Transportation Department.

For decades, taxis in Los Angeles have operated under a franchise system. Unlike New York City, where cabdrivers operate with a limited number of expensive medallions that are bought and sold on the open market, Los Angeles issues contracts to nine independently operated cab companies. The same nine operators have held those contracts since 1990.

“It was almost a disincentive to change,” Mr. Murray said.

So the city is forcing the issue, hoping to spur innovation by doing away with its franchise system. Instead, it will issue permits. It will also lift the cap on the number of taxis — and taxi companies — to whatever the market will bear. Right now, Los Angeles limits the number of cabs to 2,364 vehicles — a pittance compared to the city’s 100,000-plus Ubers and Lyfts. By comparison, New York City has 13,587 taxis, and has capped the number of ride-hail registrations at roughly 80,000.

Press officers for Uber and Lyft declined to provide information on the number of drivers who operate in Los Angeles, but both described the market as “important.”

Los Angeles is unusual in that many taxis are summoned by passengers calling a dispatcher, not by waving one down. So the shift to a centralized dispatch alone is significant.

“Revising the franchise system is a dramatic change,” said Anne Brown, who compared taxi and ride hail services in the city in 2018, when she was a researcher with the Institute of Transportation Studies at the University of California, Los Angeles.