Police in Saskatoon say they are investigating an alleged altercation between two taxi drivers on Tuesday. (CBC)

A Saskatoon cabbie claims he was punched by a rival taxi driver, in an escalating feud between competitors in the business.

The incident took place Tuesday afternoon in front of the downtown Saskatoon hotel known as the Bessborough.

The hotel has space designated as a loading zone which it allows cab drivers to use when they pick up fares.

Sabin Catana, a driver for Comfort Cabs, told CBC News he was in the spot waiting for a customer when a driver for United Cabs pulled up.

"This guy just parked right behind me and came out of his car," Catana said Wednesday.

'The second time, he hit my mouth.'—Comfort Cabs driver Sabin Catana

He said the driver demanded he move on. Catana said he was waiting for a fare and would not.

He claims the United driver then reached into his car and punched him in the shoulder.

"I pushed him away," Catana said, but the man threw another punch. "The second time, he hit my mouth."

Catana said the driver took off and that he drove to the police station to file a report.

The incident highlights an intense rivalry between United Cabs, an established business in Saskatoon, and Comfort Cabs, which sprang up in the summer as a competitor.

Many of the 40 Comfort Cab drivers left the United fold for the upstart company.

Police in Saskatoon have confirmed they received a complaint about an altercation between two taxi drivers.

Anthy Papadatos, another Comfort Cabs driver, told CBC News that she was also threatened by the same United driver later on Tuesday, when she was in the hotel space.

"I was pretty shaken up," Papadatos told CBC News. "I don't think things like that should happen."

Tension over competition

Papadatos said drivers were getting too agitated over the new competition.

"We're all working for a living," she said. "I wasn't stealing his trips, I was getting my own. So I found it very very unfair. And very scared."

Other drivers told CBC News that Saskatoon has had ongoing issues over exclusive taxi stand areas, reserved for United Cabs.

United drivers claim Comfort Cabs is encroaching in on its territory.

"It's always been a kind of a gentleman's agreement that if a cab from another company is sitting at one of our stands and one of our drivers pulls up, that that vehicle leaves the stand," Tony Rosina, a manager with United Cabs, explained to CBC News Wednesday.

"There's a new company in town, they're very aggressive trying to build a customer base and they become somewhat aggressive and confrontational with our guys in our parking spot," he added.

The manager of Comfort Cabs told CBC News the incident on Tuesday reveals the level of tension in the industry in Saskatoon.

"It's in the hands of the city police and we're definitely going to help the investigation any way that we can," Ken Yuzik said.

Saskatoon has hired a consultant to examine how the city licenses and controls taxis. It was not expected to report until sometime this winter.