A new taxi app called Smartaxi has been launched with backing from the European Union, potentially offering new competition to the likes of Uber and Hailo.

The tool alerts cab drivers to areas where lots of people are waiting for taxis, meaning they know where to go and customers are left waiting for a shorter time.

When a driver picks up a customer, they press Start in the app and then Finish when the journey has been completed. Using this data and other intelligence, Smartaxi can determine where the hotspots for potential taxi customers are at any given time.

The way in which the service works means that it becomes more accurate as more drivers use it.

“Smartaxi takes that information and – combined with its technological intelligence – can forecast where to find areas with the most demand. The heat map in the application shows in a quick glance what areas are best at that precise moment,” explained Federico Lopez, Smartaxi CEO.

Smartaxi is already being using by 400 taxi drivers in Barcelona and Moscow, with evidence that it is helping their businesses and improving services that customers receive. It will soon be tested in Madrid.

The app is free for taxi drivers to use for the first month with a monthly fee of €30 thereafter. Local authorities can fund subscriptions as part of any strategy to cut congestions and emissions.

The app makes use of the EU-funded FIWARE toolbox, a cloud-based infrastructure for building apps and services, which is part of the EU Public-Private Partnership on the Future Internet and the Startup Europe initiative to help entrepreneurs.

Mobile taxi and car booking services appear to be gaining momentum with Uber, the most high profile service of this type, recently valued at $18.2 billion after securing $1.2 billion in funding.

However, Uber has faced opposition from taxi drivers in a number of cities around the world who believe it enjoys an unfair advantage due to the lack of regulation around its service.

Along with taxi hailing app Hailo, whose network covers more than 60,000 licensed drivers in 20 cities around the world, Uber recently opened up access to its services via an API, enabling developers to integrate the technology into their own apps.

Elsewhere, car maker Daimler last week shelled out for the company behind mytaxi.