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Beijing's taxi booking center has integrated eight smartphone applications into its service, while Shanghai is considering copying the model.
Starting July 1, all requests sent through the eight partner apps go to central dispatch in Beijing, which forwards them to drivers.
Tipping functions on all eight have been removed to regulate the industry, and apps not included in the service are banned in the capital, the authority said, announcing that it will unveil its own app in the near future.
To reserve a taxi using an app or one of the four phone lines - 96106, 96103, 96109 and 96033 - costs 6 yuan ($0.98) for more than four hours in advance and 5 yuan for less.
Beijing taxi driver Jia Xuesong said although he is in favor of better government regulation of apps, he disagreed with suspending the tip service.
"It helps passengers in a rush who are willing to pay extra to find drivers easily," he said. "I don't see why the government would meddle with it."
Liu Honghui, an attorney at Yingke Law Firm, said official guidelines for the apps are necessary, due to the risks of illicit competition in a burgeoning market, such as haggling over fares.
However, he warned of excessive government intervention that may only "set up new barriers".
Yaoyaozhaoche, a popular cab app, said it has connected 50,000 taxi drivers with 600,000 passengers in Beijing, Shanghai, Guangzhou and Shenzhen since its release in March.
"We facilitate, on average, 10,000 reservations a day nationwide," said spokeswoman Zhang Qi.
She also hailed the move to integrate apps, given the huge demand from drivers and passengers, as well as the potential for bad behavior.
"A unified standard will make the market more balanced and optimize services," she added.
According to a report conducted by the Beijing research firm Analysys International in April, the taxi-hailing apps have been downloaded more than 1 million times on the Android system, with most users being in first-tier cities of Beijing, Shanghai and Guangzhou.
The taxi-hailing apps have gone through a boom, thanks to the popularity of mobile Internet and the urgent demand for taxis, with many similar apps downloaded more than 100,000 times in a single month.
"We now have 100,000 registered taxi drivers covering 15 cities, the biggest dispatch center nationwide that serves 50,000 taxi riders every day," said Cheng Wei, chairman of Dididache, the most popular taxi-hailing app in China.
Cheng said the app serves more than 3.5 million users and helps more than 70,000 passengers get taxis each day.
As Beijing and Shanghai see increasing commuters resort to the taxi apps, their popularity is also sweeping through second-tier cities like Nanjing and Wuhan.
The taxi apps are believed to provide more convenience for urban commuters to get around, said the research firm.
In Shanghai, the transport authority also plans to integrate smartphone apps into the city's cab booking center, according to Yang Yun, one of the three founders of Beijing-based Yidao Car Rental Company.
The company, which provides a smartphone app to reserve taxis in Beijing, plans to expand its business from the capital to Shanghai this summer.
"Policy risk is the biggest risk for this industry," said Yang, adding that is the reason she paid a visit to Shanghai's transport authority once she arrived in the city on July 13.
She quoted Shanghai transport officials as saying Shanghai would learn from Beijing and integrate smartphone apps into its existing dispatch center, but she said the decision had not yet been officially announced.
Shanghai also plans to ban the app's tipping function starting this August, which was banned in Beijing last month.
Comparing the cities' policies towards the apps, she said Beijing has a much harsher policy, with the relatively stronger government versus weaker enterprises, while Shanghai is more market-oriented.
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