http://www.businessweek.com/news/2013-10-10/nyc-s-taxis-of-tomorrow-will-roll-even-after-judge-blocks-plan

Bloomberg News

NYC Taxis of Tomorrow Will Roll Even After Judge Blocks Plan (1)

October 10, 2013

Nissan Motor Co.'s NV200 NYC Taxi

Supreme Court Justice Shlomo Hagler ruled Oct. 8 that the city exceeded its authority in requiring that cab operators have no choice except to buy a remodeled taxi version of Nissan’s NV200 van. Source: Nissan Motor Co. via Bloomberg

A New York judge’s decision to block Mayor Michael Bloomberg’s plan for a uniform fleet of van-like yellow cabs with sliding doors and skylight windows won’t stop them from cruising city streets.

While they may not be the only cabs allowed, as Bloomberg wants under his Taxi of Tomorrow initiative, Nissan Motor Co.’s (7201) vehicles costing almost $30,000 will still be sold to individuals and fleet owners who choose to buy them. The Yokohama, Japan-based carmaker is manufacturing them in Mexico, with some modified for wheelchair users in Indiana, said Brian Brockman, a Nissan spokesman based in Franklin, Tennessee.

“We just got them about three days ago, and we’ve sold five to individual operators,” said car dealer Howard Koeppel, who’s invested more than $1 million in a Queens-based garage for the Nissan taxis and other vehicles. “They’re good cars.”

Supreme Court Justice Shlomo Hagler ruled Oct. 8 that the city exceeded its authority in requiring that cab operators have no choice except to buy a remodeled taxi version of Nissan’s NV200 van. Unless the Bloomberg administration can win an appeal before Dec. 31, when the mayor leaves office, the effort to standardize a fleet of 15,237 cabs with the Nissan-built vans will die. The cars are due to hit the streets Oct. 28.

‘Safest Taxicab’

“Aside from its being by far the safest taxicab ever designed, the NV200 has superior leg room, a panoramic roof and a host of other comforts and amenities,” said Taxi and Limousine Commission Chairman David Yassky. The model sells for a top price of $29,700, fully equipped.

Officials wanted to give one carmaker an exclusive contract so that the manufacturer would have an incentive to include passenger amenities and durability features while keeping the price low, Yassky said last year. Current taxis are built by nine manufacturers, and the fleet was dominated by Ford Motor Co.’s (F:US) Crown Victoria, which the company stopped making.

The Nissan cabs feature seats of leather-like fabric woven with an antimicrobial vinyl resin. Passenger-controlled air-filtration and cooling systems reduce odors, Nissan says on its website. The cabs also have overhead reading lights and floor lighting. Chargers with 12-volt electric outlets and two USB ports may be used to power mobile devices.

Driver Praise

Bhairavi Desai, spokeswoman and organizer of the New York Taxi Workers Alliance, a drivers’ union, praised the Bloomberg program, saying it “allows us to use our collective purchasing power to lower the sales costs and have an unprecedented 150,000-mile warranty.”

The lawsuit challenging the Taxi of Tomorrow, she said, was filed by “deep-pocketed companies that charge high-interest car loans to drivers.” The suit was brought by the Greater New York Taxi Association, a group of medallion owners.

Warren Trosky, 57, a third-generation owner of J&I Maintenance Corp., a Brooklyn-based fleet of 65 cabs, said government regulation should be limited to safety issues and such details as interior leg room and window capacity, not what model to buy.

Free Enterprise

“It’s the United States of America,” said Trosky, who wasn’t involved in the lawsuit. “Doesn’t sound like free enterprise, does it?”

New York’s top lawyer, Michael Cardozo, said in a statement Oct. 8 that the city would appeal. The statement didn’t say whether the city may be liable to Nissan for its inability to make good on its promised exclusive contract. Kate Ahlers, a spokesman for Cardozo, declined to comment yesterday.

“We are evaluating the options we have for the next steps, and we’re also continuing to plan to put the vehicles into service later this month,” said Brockman, the Nissan spokesman, in a telephone interview.

Both major-party candidates who want to succeed Bloomberg support taxi fleet owners’ opposition to the mayor’s plan and say they wouldn’t pursue an appeal. The mayor, who is the founder and majority owner of Bloomberg News parent Bloomberg LP, is barred from seeking a fourth term.

Democrat Bill de Blasio, 52, who’s received more than $200,000 in taxi-industry donations, has said he opposes the plan because not all cabs would be wheelchair accessible. The Bloomberg plan calls for about 2,000 of them to be fitted for disabled riders.

Jobs Cited

Additionally, de Blasio said in a letter to the taxi commission last year that the city selected “a bid that did not contain a plan to create jobs in New York City despite the large contract awarded to the company.” De Blasio is evaluating the ruling, his spokesman, Dan Levitan, said yesterday by e-mail.

Republican Joseph Lhota, 59, has cited “environmental and business concerns” because Bloomberg’s plan would add 2,000 yellow cabs as well as 15,000 green-colored liveries to service passengers in underserved areas of northern Manhattan and the four other boroughs.

Bloomberg’s outer-borough plan won approval in June when the state’s Court of Appeals declared it constitutional. Since August, apple-green sedans have been stopping for street-hailing passengers where yellow-cab service had been hard to find.

Another Suit

The approved increase in the fleet also meant that the future administration will be benefit from more than $1 billion in revenue from the sales of new medallions, or taxi-operating licenses, which trade for about $1 million each.

The Taxi of Tomorrow program is also facing litigation in federal court. Disabled people and advocates for the handicapped sued the commission in federal court in Manhattan in January 2011, seeking to force the city to make its entire taxi fleet wheelchair accessible.

U.S. District Judge George B. Daniels ruled in December 2011 that the commission subjects disabled people who use wheelchairs and scooters to discrimination, in violation of the Americans with Disabilities Act.

The U.S. Court of Appeals in New York overturned Daniels’ ruling in June 2012 and found that the act doesn’t obligate the commission to require taxi owners to provide access for disabled people. The plaintiffs in August asked Daniels to allow it to amend its lawsuit to declare that the NV200 is a van and therefore must be accessible.

The state case is Greater New York Taxi Association v. New York City Taxi and Limousine Commission, 101083/2013, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Henry Goldman at hgoldman@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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