"New York City has always been a taxi-hailing town, and we're pleased to be able to offer passengers more than one way to accomplish that," city Taxi and Limousine Commissioner David Yassky said in a statement.
A lawyer for e-hail opponents didn't immediately return a call about the ruling, which upheld a lower court decision.
With the appeals court's approval, a few companies started offering the service while the appeal played out.
Using an app, a potential passenger requests a ride, all participating cabbies within a certain distance get the inquiry and the driver who responds first gets the fare. E-hail systems are already in use in some other cities in the U.S. and abroad, including London.
Some cabbies are finding e-hailing useful to connect with passengers late at night and outside Manhattan, said Michael Woloz, a spokesman for the Metropolitan Taxicab Board of Trade, a group representing fleet owners with a total of more than 5,200 cabs. The association joined the lawsuit to support e-hailing.
"It's something that our drivers are learning how to best utilize," Woloz said by phone.
During nearly 12 years in office, Mayor Michael Bloomberg has driven a number of changes to the city's taxi system. Several have spurred lawsuits.
This month, a court blocked a plan to transform the fleet with a minivan-style "Taxi of Tomorrow," three weeks before it was to start taking effect. The city is appealing that ruling.
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