Hailo announced on Tuesday that London passengers will no longer be charged a minimum fare for hailing a cab using the app during the daytime. This is the second time they have reduced the fare in 2014.
Passengers were previously charged a minimum £8 when using the taxi-hailing service, even for short journeys.
The company met resistance from passengers when it hiked its minimum fares in October last year to at least £10, or £15 between 10 p.m. and 2 a.m.
At the time it said this was to ensure enough taxi drivers would pick up Hailo customers. But some passengers were not impressed by the decision.
In January the company, which is facing increased competition from the likes of Uber, announced a 20% cut in the minimum fare.
It went further on Tuesday, completely abolishing its minimum fare between 10 a.m. and 5 p.m., while making it a flat £10 minimum at all other times.
"We've been listening carefully to your feedback on what we could do to improve Hailo and we're acting on it," the company said in an email to customers.