Taxi hailing app MyTaxi has clarified that a new €5 passenger cancellation fee will not apply to business accounts.

In updated terms and conditions on Thursday, the firm said that from May 23rd customers can still cancel a trip but may be charged a fee.

The company said a cancellation fee applies if a customer cancels an order two or more minutes after a driver has accepted it.

If a customer is not at a collection address "within five minutes of the taxi driver's arrival", they will also be charged €5.

While cash-only customers who have incurred a cancellation fee "will be blocked" from using the MyTaxi app after two cancellations, until full payment is made.

A man holds up a smartphone with the 'MyTaxi' application in front tof a 'Mytaxi' car | Image: Axel Heimken/DPA/PA Images

However in a statement on Friday, the company said: "Passengers will start to be charged a cancellation fee for cancelling on drivers after their driver has accepted and is en-route to the passenger.

"While this charge will apply to everyone while hailing on their personal account, this charge will not be applied when you order using your mytaxi business account".

Earlier this year, the firm announced it was to re-brand as 'Free Now' - the second re-brand in as many years.

The company said the change was as a result of its majority shareholder, Daimler, joining forces with BMW.

It carried some 16 million passengers across Ireland in 2018, its busiest year ever.