City transportation is an increasing problem. Public transportation is cost effective, but do not provide door-to-door transportation. This makes the far more expensive cabs attractive and scarce. This paper proposes a location–based Cab–Sharing Service (CSS), which reduces cab fare costs and effectively utilizes available cabs. The CSS accepts cab requests from mobile devices in the form of origin–destination pairs. Then it automatically groups closeby requests to minimize the cost, utilize cab space, and service cab requests in a timely manner. Simulation–based experiments showthat the CSS can group cab requests in a way that effectively utilizes resources and achieves significant savings, making cab–sharing a new, promising mode of transportation.