Hi Ausracer - welcome to the forum!
That is a very frustrating - and strange - problem... Because everything is working fine without the app, I am pretty sure you do not need a power supply upgrade. Again, because everything is working fine without the app, I would think the cars, controllers and the track are all functioning correctly and are well maintained.
Because the problem starts when when you launch the app, my hunch would be to look at the app. ARC Air (and ARC Pro) actively control the power to the track via the app features. So a major glitch in the app install or a problem with device compatibility could cause the problem you describe. Compatibility is discussed here: https://www.scalextric.com/uk-en/forum/arc-app-device-compatibility/?p=1 - it can be really handy to try another device (particularly an Apple device on the list) to see if you can get your ARC Air working with the app.
If the cars have never worked with the app, I would try delete the app and then doing a fresh install from the Apple App Store, Google Play or the Amazon AppStore, depending what version of the app you are using. Try running the cars again. If that fixes it, great! If you still have a problem, but you notice any change (however small) try the delete / fresh install process again.
If you still have no luck after 3-4 delete / install attempts, the next step is to try the App Race Control (Legacy) app - this is the original version of the app and works very well with ARC Air. You will find it still available for Apple, Android and Amazon Fire devices.
If your cars did work for a while with the app, but don’t now, make sure you hard-stop the app and relaunch it every time you use it. The app can get glitchy without good housekeeping. I’ve written up more info, including some good housekeeping tips, for the ARC app here: https://slotracer.online/community/showthread.php?tid=181&pid=1372#pid1372
I hope that helps you getting your ARC Air powerbase working with the app - it really is a great set-up. If you need more help, please let us know the exact model of smart device you are using, plus the version of the operating system it is running. There is a small chance that the issue could be in the circuitry the app connects to in the powerbase and that would require a replacement - however it is important to try the app / device solutions first, otherwise you’ll end up with a new powerbase, but the same problem!