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App Lets Users Hail Taxi from Smartphone

iPhone 4S
Michael Nagle | Stringer | Getty Images News
iPhone 4S

Longtime readers might recall the start-up Uber we covered last year. It lets users book a Town car through a GPS-enabled app or by text message.

Now, the company has revealed it is launching a test program in Chicago to offer a similar service for taxi cabs.

Here's how it works: the app on Android or iOS smartphones lets users input their location on a map. After a handful of texts alerting passengers of the car's arrival, they hop in and head to their destination.

Once they drop off the passenger, drivers input the fare — gratuity and service fees included -- and it's automatically charged to the user's credit card on file.

A select group of Uber users in Chicago will have the app enabled on their smartphones before it rolls out to more people in the coming weeks.

"We have been asking ourselves whether there are less expensive services where we could merge Uber's renown quality processes with the power of choice for the consumer — the best quality for every price point," reads Uber's statement on the pilot program.

Squawk Alley