TORONTO -- The City of Toronto has issue da "private transportation companies" licence to ride-hailing app Uber.

The licence, which was issued Tuesday, puts Uber's transportation service UberX into a category that's separate from taxis or limos.

According to the city website, private transportation companies have to connect prospective passengers with drivers of private vehicles through an app.

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The change is the result of a new bylaw that city staff say is meant to encourage "increased competition and innovation" in the ground transportation industry.

A city representative says that with the new licence, Toronto will begin to screen and issue "PTC driver licences" to individuals who drive for UberX.

They say the screening includes criminal background checks and driving record checks.

Toronto is the second jurisdiction in Canada to issue a licence to Uber after Edmonton. Ottawa also passed regulations this spring, which will take effect at the end of September, Uber spokesperson Susie Heath told BNN. 

"This is another important milestone for bringing affordable on-demand transportation options to Toronto and comes as a result of cooperating with the City of Toronto as they work to implement the new city bylaw," Heath said in an emailed statement to BNN.

Less than 24 hours after the licence was granted, busloads of cab drivers went ahead with a planned protest at Toronto's licensing office at the East York Civic Centre on Wednesday morning. The taxi industry argues that the city hasn't moved fast enough to implement a new regulatory regime for Uber, which took effect on July 15. 

With files from BNN