Hamilton Cab moved one step closer to surpassing the city's largest taxi company this morning after taking over operations for Yellow Cab.

Today, Hamilton Cab starts dispatching for around 40 new cars after buying the city's oldest taxi company in a deal that was quietly struck last February.

It's a move that promises to heat up Hamilton's already lively taxi war between the young Hamilton Cab company and the only other company, Blue Line, the city's largest fleet.

"For the first time in 15 years, Blue Line is going to have some real competition," said Hamilton Cab CEO Jagtar Singh Chahal yesterday.

"And ultimately, competition is good for the customer."

Chahal has played a key role in the city's taxi turf war.

The 41-year-old helped found the upstart Co-Op Taxi in 2002 after leaving Blue Line with a group of other drivers.

It was a highly publicized and controversial move involving allegations of racism against Blue Line, which it countered with a libel lawsuit that was eventually settled in its favour.

A year later, Co-Op merged with Veterans Taxi to form Hamilton Cab.

Blue Line vice-president Anthony Rizzuto said yesterday that news of the deal has not rattled him.

"You can strangle yourself worrying about what your competitors are doing. We focus on our own customers and that's it."

Blue Line has a fleet of 215 vehicles while Hamilton Cab now has around 200.

The two companies made a small dent in their bitter rivalry last year when Chahal and Blue Line president Tony Rizzuto, Anthony's father, struck an informal agreement to stop courting each other's plate owners.

A limited number of taxi plates are licensed in the city, making them a coveted investment. There are 407 licensed plates in Hamilton.

"(Hamilton Cab) was on a warpath trying to solicit plate owners loyal to us," said Rizzuto.

Hamilton Cab president and former Veterans co-owner Ron VanKleef helped acquire Yellow Cab for the upstart company.

Long-time Yellow Cab owner Albert Dicasa first mentioned the idea of the sale to VanKleef in a meeting last year. The two, who have known each other for decades, had an informal agreement that Dicasa, 82, would give him first crack at the company.

VanKleef and Chahal toyed with the idea of switching the company name to Yellow Cab after the merger and even consulted marketing experts at the DeGroote School of Business.

They decided to stick with Hamilton Cab to capitalize on the branding inroads they have made so far.

Both partners started their careers driving Yellow Cab taxis.

The company will soon relocate to Yellow Cab's offices on Cannon Street East and Wentworth Street North.

Dicasa, who has been in the taxi business for 61 years, said it was time to hand over the reins.

"How much longer could I go?" he asked yesterday.

Dicasa added having at least two major players on the streets of Hamilton was necessary for a healthy taxi industry.

"There should always be some competition."

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