Taxi service Uber has won the battle to get back on the streets of New York — but it’s not emerged unscathed.

The City of New York has agreed to let Uber’s taxi service operate within the city, but has also imposed a few limitations on how it will work.

For one, while users will be able to use Uber to hail taxis, Uber itself won’t process the payments. Instead, riders will have to pay their drivers with plain ol’ cards and cash — which is significantly less cool than Uber’s auto payment system. (None of this affects Uber’s black car service, which still operates as normal.)

Uber’s other two limitations are also worth noting: Not only will the supply of taxis be limited at first, but Uber won’t be allowed to bring people to and from JFK and LaGuardia airports. Those are just the rules, and while they stink, Uber can either deal with them or hit the (non-New York City) road.

Uber’s return comes six months after New York’s Taxi and Limousine Commission blocked the taxi service from operating in the city. “We’ll bite our tongues and keep our frustration here to ourselves,” Uber CEO Travis Kalanick said at the time.

Hopefully, this latest news leaves Uber a tad less frustrated.

Photo: Flickr/matt-luch

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

James Bond and Uber share an appreciation for efficient and sleek transportation. At least, this is the angle Uber went for in an announcement on the company blog this morning.

The on-demand car service has released a new Android app with the same “new paint, chrome rims” as the iPhone app, which was updated in December to make the Uber app “as elegant and comfortable as the ride.” Features include integration with Foursquare’s location database, so users don’t need to know their exact address, and saved frequent pickup locations, as well as a fare estimate calculator.

Additionally, Blackberry and Windows phone users now have access to Uber for the first time.

These new apps complement Uber’s aggressive geographical and team expansion, which are geared towards turning the company into “everyone’s private driver.” Since launching its first luxury black car offering in 2009, Uber has added taxi, SUV, and UberX into its suite of products to make it more accessible and affordable.

Furthermore, CEO Travis Kalanick recently announced at SXSW plans to grow his staff to 800 members and propel global expansion. Uber is now available across Europe, as well as the U.S. and Canada, and recently began testing its service in Asia. The company has clearly not been deterred by frequent legal battles with transportation regulation agencies.

Kalanick is extremely vocal about his belief that the taxi cab industry is broken and his unflagging commitment to disrupting it. Uber’s passionate and active user base has been instrumental in keeping Uber afloat while city commissioners and regulators were trying to shut it down. Bringing the app to more users will only expand its community and keep Uber marching along in its battle to create a taxi system that is convenient, and even pleasant, for consumers. Even if your average night out “doesn’t include taking down super-villains.”

Photo credit: Shutterstock

We are working with UK Trade & Investment to showcase the United Kingdom's thriving start-up and investment scene through a series of posts and video interviews at SXSW. Check out all of the coverage here. As always, VentureBeat is adamant about maintaining editorial objectivity.

Travis Kalanick is a startup warrior who fearsomely defends his company against all who challenge it.

The CEO of Uber revealed the next stage of his battle plan while speaking at a Lean Startup event held by 500 Startups and Eric Ries at SXSW in Austin. Kalanick said he plans to quadruple the size of his staff in the next year, growing from 200 to 800 members, and continue global expansion.

Uber is a car service that books luxury taxi rides on demand from smartphones. The transactions are completely done through the mobile app, which helps get around the tangled web of transportation regulations.

While users love it, Uber has had to defend itself from day one. Cab services are heavily regulated in America, and many transportation agencies and city councils said Uber is illegal because it results in unlicensed cabbies to drive a taxi. Kalanick has fought for the right to operate around the country, facing challenges in California, Washington, D.C., New York, and Chicago.

This week at SXSW, Austin’s City Council tried to shut Uber down, and Kalanick responded by offering the service for free. SideCar, another ride-sharing app, is doing the same. The municipal complaint is that services like these detract revenue from the city-licensed cab drivers, but efforts to uphold the hegemony of taxis are eroding as startups like Uber, SideCar, and Zimride/Lyft continue to acquire customers and enter new markets.

Kalanick his known for espousing the mantra of “ask for forgiveness, not for permission.” His company is now in 30 cities around the world, and he is fighting battles in half of them, although he doesn’t seem to mind.

“Competition is fun,” he said at TechCrunch Disrupt 2012. “If there isn’t competition, what is the freaking purpose? Let’s have some fun and make the world a better place at the same time. You have to be fighter, you have to be a warrior, and if not, you should go do something that is a little less disruptive. I’m bringing it, I’m not sleeping. If the other guy is sleeping, I am going to kick his ass.”

Soon there will be 800 in his army, not to mention the thousands they shepherd around, to keep fighting the good fight — or in this case, the good drive.

Watch out, Uber: The cab-hailing app Hailo is hot on your heels in New York City, with a new $30 million funding round, reports All Things D.

This new round values the London-based company at $140 million, multiple sources tell All Things D, with the lead investor likely being Union Square Venture’s Fred Wilson. Hailo raised $17 million in a first round from Accel Partners, Wellington Partners, and Atomico in March.

Hailo offers apps that connect cab drivers with passengers. For cab drivers, it’s a way to fill in potential downtime, and for passengers, it’s a way to get cheaper cabs just as easily as Uber’s expensive on-demand town cars.

“The taxi market is the quintessential mobile app. You’re mobile, they’re mobile,” Hailo cofounder and chief executive Jay Bregman told VentureBeat earlier this year. “No one has been able to make big networks of cabs without having the customers. [Drivers are] using this [app] even when there aren’t any customers because the app helps them.”

Now that NYC has adopted an e-hail pilot program for taxi apps, it makes sense for Hailo to focus it’s energy there (and expect all of its competitors to step up their game as well). It covered 15 percent of London’s cabs back in March, and it’s already launched in Boston and Chicago.

While Uber is well suited to fixing San Francisco’s hellish taxi ecosystem, Hailo’s strategy of empowering existing cabs and working directly with drivers could help it fit in better in NYC.

Every time I get off a plane, I wish I could teleport to my final destination. After spending hours in transit, the last thing I want to deal with is more transit, but unless there is a generous family member awaiting my arrival, ground transportation is the only available option.

Travel startup Mozio is attempting to make this leg of the journey less painful. The site aggregates all the limos, taxis, ride shares, shuttles, shared vans, and public transit to help travelers go the “final miles.” The best choice for getting from terminal to destination (or vice versa) is often confusing, particularly when touching down in a new place. Cost, timing, convenience, and comfort all need to be factored in.

“No one lives or vacations at airports. Yet travel search engines seem to always neglect the fact that one actually needs to get into the city once you land,” said CEO and founder David Litwak. “Getting to airports on your own can be the most expensive, take the longest, and cause the most stress out of any other part of the trip. For a quick flight from D.C. to New York, getting to and from the airport can take as much as 50% of the cost and time of the entire journey!”

Litwak has traveled to 65 counties, and this was a frustration he repeatedly encountered during his adventures. Booking a flight online did not include all the incurred transportation costs, and researching this independently took a needless amount of effort. After graduating from Berkeley in 2010 with a computer science degree and working for a few technology companies, he founded Mozio.

The technology works through the APIs of participating ground transportation providers. Mozio partners with these companies to include their offerings in the search engine. The team also seeks out local providers to give the most comprehensive picture of the transportation in each location.

“Our belief is that most people want to know all their options in a city,” Litwak said. “If a particular option in a city happens to be the best, they want to know about it, and this changes city by city, and region by region. Some regions have airporters that will get you very close to your destination for only a few extra dollars. Some cities have taxi fares that are super low, like Chicago, and others have trendy tech startups like SideCar that offer a cheap way to get a personalized ride to the airport. The equation is different in every city.”

The company is still new and building out its partnership network as well as working on its API. It has already generated interest from companies like TripAdvisor and Orbitz. Mozio has raised $185,000 in startup capital from Chairman of Orbitz Jeff Clarke, as well as Ryan Tu, Bradley Schwartz, and Amidzad Partners. The team of three is based on San Francisco.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

When one door closes, another one opens. Just a day after Uber shuttered its NYC taxi service, the company brings TAXI to San Francisco. Now, in addition to town cars and SUVs, taxis will be an option for San Francisco in the Uber app.

The company’s mission is to provide on-demand transportation across a range of price points. In a blog post from this evening, Uber’s community manager Matt Hearns wrote, “Choice is a beautiful thing. … You shouldn’t have to juggle a dozen different apps to figure out the best way to get where you’re going.”

The service went live today but is being released gradually to ensure a smooth transition. Drivers will still use the meters in their vehicles to calculate the base fare. Instead of directly charging the passenger, drivers will input the fare into their Uber issues iPhones. Any tolls, additional charges, gratuity, and a booking fee will be included, and then the total amount will directly charge the rider’s credit card through the app.

As opposed to other cab-calling apps that contact dispatches, Uber’s TAXI functions as a digital “hail” that pings the nearest available car. Before signing up drivers, Uber interviews and logs their personal information so the same system of accountability exists.

While founder Travis Kalanick’s team can’t manifest more taxis for stranded San Franciscans, they can try to make the hailing process more convenient than competing with hoards of other urbanites for a coveted cab.

German peer-to-peer taxi app startup myTaxi has announced expansion into the US – starting with Washington DC and with other cities set to follow.

It’s a big move for the Hamburg-based company, founded in 2009 by Sven Kulper and Niclaus Mewes (above, L-R) and now operating in 30 German cities as well as Vienna, Zurich and Barcelona.

Like Uber and Hailo, myTaxi lets users order a taxi with a smartphone rather than traditional “hailing” or phone booking. myTaxi also offers a ratings system for reviewing drivers, live tracking on taxi approach and – since July – a smartphone payment option.

With its latest geographical expansion, myTaxi will be entering a space that’s fiercely competitive for one so new. It may claim to be the first-mover worldwide, but Uber, for example, has been active in the US since 2009 (though only fairly recently in the taxi rather than private driver space). UK-based Hailo isn’t in the US yet, but it launched in Toronto this month and is a planning a roll-out to New York, Boston and Chicago. Then there’s Taxi Magic, a lesser-known taxi booking app available in the US and Canada.

Still, myTaxi is in a solid position to compete – it’s proven itself over 2.3 million app downloads in Europe and is supported by investors T-Venture (Deutsche Telekom), Daimler’s car-sharing company Car2Go (with talk of integrating MyTaxi into Car2Go’s app), KfW Bankengruppe, Cinco Capital GmbH and e42 GmbH.

Anyway, at this point, the real trouble for Uber and co. seems to be the traditional taxi industry and city regulations. It seems the DC authorities at least are softening up, at least for myTaxi:

The DC Taxicab Commission welcomes any electronic reservation company such as myTaxi, bringing technological advancements to the District of Columbia,” DC Taxicab Commission Chairperson chief Ron Linton said in myTaxi’s press statement yesterday.

That’s a good start – and the US market, home to 10 billion trips on public transportation last year, according to myTaxi’s stats, is one well worth fighting for.

This story originally appeared on VentureVillage, VentureBeat’s Europe-based syndication partner.

As debates over foreign policy and the state of the economy rage onscreen, another battle is sweeping our nation’s streets. Transportation agencies and alternative transportation networks are facing off, and venture capitalists at least, are hedging their bets with the startups.

Ridesharing company SideCar has announced raising $10 million in funding. This announcement comes just two days after news broke that the California Public Utilities Commission issued Cease & Desist orders to SideCar, Lyft and Zimride, stating that these businesses violate state laws.

These three ride-sharing apps, which connect private drivers with passengers via smartphones, are continuing to operate. The law prohibits transportation services and drivers from operating without proper consent, but the founders assert that the donation-based business model protects them against these charges. Uber, another popular car service, has also been locked in legal battles with regulatory agencies as it attempts roll out its service in new markets around the country.

The popularity and widespread adoption of these taxi alternatives make them a viable investment, even considering the sticky legal issues. Since launching earlier this year in San Francisco, SideCar has facilitated more than 50,000 rides and grown a community of hundreds of drivers and thousands of passengers.

The strong reactions from regulatory agencies and the fierce dedication of consumers frustrated with traditional taxi options are a clear sign that this industry is in a state of disruption.

This investment from Lightspeed Venture Partners and Google Ventures will support expansion into new markets, and according to CEO Sunil Paul will “accelerate the crowd-sourced transportation movement.”

To this effect, SideCar has also announced acquiring a US Patent that covers the company’s method for accepting passenger pickup requests, determining location, and dispatching vehicles to that location.

When the dust does clear and peer-to-peer transportation networks are the norm, these companies and their investors stand to benefit from being early voices to take a stand and deliver inexpensive, reliable, convenient rides. What a concept.

Travis Kalanick is a fighter. As he sat on stage at TechCrunch Disrupt, the Uber founder radiated intensity as he spoke about his company’s continuing battles with regulatory agencies.

It is an easy stretch of the imagination to picture him at the helm of an army, waving a revolutionary flag and calling for Liberty, Equality, and Fraternity.

These are, in fact, the values he says he is fighting for. Uber is a car service where users can book luxury rides on demand from their smartphones. It is more expensive than the average taxi service, but the quality of the service and vehicles is higher. It offers a desirable arrangement for riders who have trouble finding a cab, or who prefer to travel in comfort and style, as well as for the drivers who can generate extra income.

Uber’s opponents are local transportation regulatory agencies. Cab services are heavily regulated in American cities, and regulators have claimed that Uber is illegal. Kalanick, of course, disagrees, and has gone up against taxi commissions across the country to keep his business alive.

“I don’t understand regulators,” Kalanick said. “They are governed by three principles. One is cronyism, they feel the need to protect people they regulate. Two is control. If they don’t have rules for something, they feel it is illegal even if it isn’t. You have to have rules to enforce them. Three is communication. They are incredibly sensitive to what is in the public view. But If you only follow the rules, they will never let you make the city a better place.”

Kalanick strategically designed his business to get around the tangled web of transportation regulations. While he is engaged in legal drama, he said he has legions of riders taking up his cause on the social media streets.

“What social media allows us to do is give consumers and citizens a voice to make their city a better place, let the right things happen, let innovation flow,” Kalanick said. “We put so much love into our product and it delivers so much value that if a politician or a regulator tries to take it away because of incumbent industry pressure, they get enraged. This is not a blue or a red state issue, this is about people having a good quality of life and high quality of services in cities around the world. We are making the world a better place.”

In the wake of Uber, a number of other alternative taxi services like Lyft and Sidecar have cropped up. Cities have also responded by changing their regulations to make cabs more accessible. Not one to shy from a fierce playing field, Kalanick said he welcomes the competition.

“Competition is fun,” he said. “If there isn’t competition, what is the freaking purpose? Let’s have some fun and make the world a better place at the same time. You have to be fighter, you have to be a warrior, and if not, you should go do something that is a little less disruptive. I’m bringing it, I’m not sleeping. If the other guy is sleeping, I am going to kick his ass.”

The company shaped the new version based on feedback from users. It offers a whole new platform with a rebuilt backend and enhanced user interface. Now, the scheduling capability is front and center. Those seeking transportation have the ability to book vehicles in advance, and Taxi Magic’s technology will factor in a variety of conditions to intelligently judge what time the car should arrive. The app looks at real-time traffic and weather conditions, as well as data regarding the overall demand for taxis around that date and time.

Taxi Magic’s system also retains user information to make the booking and paying process even easier. Frequently used addresses are saved so riders can simply tap their location. And the app accepts three payment options: cold, hard cash; credit/debit in the cab; or mobile payment.

These features apply for both advance scheduling and on-demand service. Flagging down ground transportation can be tricky, particularly during peak hours or in cities where the demand far outweighs the need (*cough* San Francisco *cough*). Ringing up a cab company is no guarantee that a car will arrive in a timely manner (or at all), nor is standing spread-eagled on a corner, inevitably in the rain. Taxi Magic conveniently provides estimated arrival times, so rather than twiddling your thumbs and wondering if a cab will ever come, you can track the progress of nearby vehicles.

Calling a cab using Taxi Magic does not automatically mean it is reserved. Taxi Magic sends the requests to the dispatches of the fleets it works with, but it is still up to the individual drivers to take the fare. One of the most exciting features in the pipeline is a percentage rating that will tell bookers the likelihood a car will come. Users can make transportation decisions accordingly. A rating of 20% may mean it is time to look into a bus or break out the walking shoes.

Taxi Magic marketing director Matt Carrington shared with me a few bits of back-seat wisdom.

“Most taxi drivers don’t want to go to remote parts of town because most fares are in denser areas,” he said. “There is a battle between driver and rider going on. A big concern is that a rider will ditch the ride, and drivers want to get the best fare possible. We factor in what the service level looks like, so if a taxi does not come, users won’t be upset.”

Taxi Magic currently operates in 42 markets across the US and has 25,000 vehicles in its system. Each city has distinct characteristics that impact the way the app operates. For example, Taxi Magic has a major presence in San Francisco, where it is infamously challenging to find a cab due to the fact that, on a per capita basis, SF issues an appallingly low number of taxi licenses.

In a place like New York City, where cabs are ubiquitous, residents do not rely on apps to hail cabs. In the time it takes to call and book a cab, at least five empty ones have probably driven by. The sedan service (similar to Uber) does well, however, as New Yorkers seem to appreciate riding in style. DC has a number of independent cab companies and drivers, which can make quality regulation a challenge. Taxi Magic has met with great success in LA due to that city’s sprawling geography, because people require cars often and are used to paying large fares.

Taxi Magic is the flagship product of RideCharge Inc, a company based in Alexandria, VA. RideCharge was initially founded in 2007 to facilitate ground transportation for business travel, and the company was ahead of the game when it launched Taxi Magic as early as 2009. Since then competitors like Cabulous and cab4me have cropped up, Taxi Magic still dominates the field. It has recieved $20M in funding to date from Concur and Veolia Transportation and will soon cross the 50 employee threshold.

Pinterest-esque Wanelo gets $2 million in its shopping cart

Shopping for the next e-commerce hit, investors have spent $2 million on budding startup Wanelo, an online shopping community where regular people share their uncommon finds. This $2 million round of funding was Wanelo’s first. Floodgate, First Round Capital, Naval Ravikant, Forerunner Ventures, Roger Dickey, Aayush Phumbhra, Andy Dunn, and other angels all participated. Read more on VentureBeat: Investors spend $2M on Wanelo, a social store that looks a lot like Pinterest.

Hail a cab in the 21st century with GetTaxi, which raised $20 million today

Israel-based GetTaxi has raised $20 million to take the hassle out of hailing a cab. GetTaxi places GPS components into taxi cabs, and provides customers with an application to flag down a cab using their mobile phones. Read more on VentureBeat: GetTaxi CEO actually a cab driver, sets sights on NYC.

Cloud computing gets a new chunk of money, $25M

Delphix, a startup that exists at the boring-to-consumers-but-otherwise-a-total-goldmine intersection between cloud computing and big data, has just dried the ink on a healthy funding deal — one that brings tech heavyweights like Battery, Greylock, and Lightspeed to the table. This is the startup’s third round of institutional funding, and it’s a whopper — $25 million and oversubscribed. Read more on VentureBeat: Big data + cloud computing = $25M from Silicon Valley’s biggest VCs.

Read all about it: Wattpad raises $17.3 million in capital

Six-year-old, storytelling and reading community Wattpad has raised the eyebrows of investors anxious to see how the startup’s plot unfolds. The cost for penning Wattpad’s next chapter? Just $17.3 million in cash. Khosla Ventures led the $17.3 million Series B round in Wattpad, the companies announced today. Yahoo co-founder Jerry Yang, Union Square Ventures, and Golden Venture Partners also participated in the round. Read more on VentureBeat: Storytelling service Wattpad raises $17.3M for next chapter.

Fanatics grabs money for foam fingers and stadium gear

Sports-centered e-commerce site Fanatics, owned by Kynetic, grabbed the attention of Silicon Valley venture capital firms Andreessen Horowitz and Insight Venture Partners to raise a $150 million round of funding at a $1.5 billion. Read more on VentureBeat: Fanatics shows its team spirit with $150M investment.

Threadflip gets $6.5 million in a first round of funding

Online consignment store Threadflip grabbed $6.5 million first round of funding. Much like a traditional consignment store, the website lets you buy and sell gently used women’s clothing. Shasta Ventures led the round, with participation from Lowercase Capital, First Round Capital, Baseline Ventures, Slow Ventures, Forerunner Ventures, Greylock Discovery Fund and Andreessen Horowitz. Read the press release.

Magnetic attracts $10 Million for ad targeting

Search retargeting company Magnetic grabbed $10 million funding Wednesday. Magnetic does ad targeting related to search terms. Edison Ventures led the round.

Makie raises $1.4 million seed round for creepy custom dolls

Make a computer model of an alien-looking doll and have it printed in 3-D; that’s the premise behind Makie’s business. You can design a doll in your likeness and print it in 3-D so you can hold in your hand. The company raised $1.4 million in seed money from Lifeline Ventures and Sunstone Capital. Matthew Wiggins, Daniel James, and Cedric Littardi also participated.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

One thing Sam hates about being a Manhattan cabbie is picking up tourists hoping to see a Broadway show. “They are always yelling at me, drive faster, we’ve still got to buy our tickets.”

So Sam, who asked we not use his last name, was first on line to try out Verifone’s new taxi tablets, which are being piloted in about 100 Big Apple cabs in place of the traditional TV unit. One of the features being tested is the ability for riders to purchase tickets for movies or Broadway shows during the ride, and get their ticket printed out along with their receipt.

Riders hoping to hop in a cab, check their email and play a quick game of angry birds are in for a letdown. “We’ve tested it, and believe, playing angry birds in a moving vehicle is not as fun as it sounds,” said Jason Gross, Verifone’s director of strategy and marketing, who came along for the test ride. Half the time we’re in a taxi it doesn’t seem to moving much at all, but let’s not quibble.

Some of the cool things Gross and his team are testing out: social media integration that displays tweets and facebook updates geo-tagged to your current location as you’re travelling. A lottery service that lets riders buy their tickets at the same time as they are paying the fare, and credits the winnings directly to their account if they use a debit card.And if riders decide to swipe their cards at the beginning of the ride, so that they can pay quickly at the end, Gross says Verifone is testing out ways to personalize the TV and news experience based on past preferences. “We just want to be careful to protect people’s privacy, because this is based off a payment,” Gross emphasized.

The new tablet taxis are being tested in part because Square, the red-hot Silicon Valley payment startup, convinced the city to allow it to test out its own tablet taxi that would use an iPad and a Square credit card reader. “We welcome the competition, but I don’t think Square really knows what it takes to support a fleet of cabs,” said Chris Polos, Verifone’s vice-president of sales. “This is a mission critical unit, its illegal for cabbies to drive without them. If it breaks, we can get it repaired and running again 24/7. I’m not sure Square can say the same.”

Instead of an iPad, Polos says Verifone is using an tablet they built themselves with open source hardware and running Windows XP. “We’re all about bringing more competition and finding ways to drive down the costs for drivers and riders,” Polos said. What about the fact that Square would offer lower fees than traditional credit card readers, we asked. “You get what you pay for. They aren’t going to have streaming TV bringing news to riders. What they offering sounds like a stripped down experience, basically just a tablet with a map.”

Them’s fighting words, but we’ll be bringing you all the details of Square’s efforts in the near future, when we take a ride along in one of their pilot taxi cabs.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Last week, we heard that mobile payments powerhouse Square was talking to the Taxi and Limousine Commission of New York City about putting its card readers in cabs. Today, that same commission has approved Square and two other companies to put its tech in 30 cabs for a pilot program.

VeriFone Systems and Creative Mobile Technologies currently own New York’s taxis when it comes to credit card payments. New York’s taxi companies often withhold 5 percent of credit card fares to cover the charges of processing, leaving the drivers with less cash. Putting Square into the equation shakes up the scene and could push VeriFone and CMT to find less-expensive ways to cover processing.

Originally, Square was supposed to be the only company doing a pilot program to test new payments and it wanted 50 cabs for testing. But VeriFone and CMT got worried when they heard Square’s proposal, so they will also get to be part of the pilot program. VeriFone and CMT already have in-cab technology, but will each be afforded 30 cabs to try out new solutions.

Taxi Commissioner David Yassky has indicated concern about how much money is being lost in processing. Thus, having Square, VeriFone, and CMT fighting a battle to bring costs down will be a big win for taxi drivers and companies.

“We’re really looking forward to seeing some very innovative alternate payment solutions,” Yassky said in a statement to the Wall Street Journal.

Crazy taxi driver: Konstantin Sutyagin/Shutterstock

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Almost all of New York City’s iconic yellow cabs now have a TV in the back seat playing a loop of local news and entertainment. But if innovator Jack Dorsey has his way, those taxi TVs could be replaced with tablet computers that use his company Square’s technology to accept credit card payments.

Square recently met with the Taxi and Limousine Comission, according to CBS, to discuss a pilot program that would put tablet computers into 50 cabs in place of the current Taxi TV system. The company will have an official meeting with the TLC on March 1 to hash out the idea.

As an interesting historical sidenote, Dorsey has been fascinated by urban transportation and dispatch systems since he was a kid. The open source software he designed in high school is still used by many cab companies, and the kernel of his idea for Twitter came from his work on dispatch software for taxis and couriers.

Putting tablets into taxis would allow riders to make purchases during the ride, for example buying movie tickets while driving to the cinema. Square would process the credit card purchase and take a cut. The city hopes introducing Square into the mix will increase competition and drive down processing fees, benefiting both drivers and riders.

Another New York service, Foursquare, has also been mentioned in the press coverage of this initiative. It’s not clear if Foursquare is getting in on the ground floor or is just a relevant hometown example of an app that riders might use while in a taxi.

Having a tablet connected to the web in a taxi does have a lot of risks. How do you keep people from surfing to adult only sites and installing spyware onto the device. What happens when a rider logs into their Gmail and forgets to log out before leaving the cab. These are important details. Still, a tablet is clearly a much more flexible (in the software sense) and interesting platform for creating new and interesting apps that add value to a trip, when compared to a traditional TV.