Taxi of Tomorrow: A Bad Idea Today

Last week, Mayor Bloomberg announced the winner of his “Taxi of Tomorrow” competition, the Nissan NV200, a four-door van that will become the all-but-exclusive vehicle of the city’s taxi fleet. The NYT Times story is here, but the news was reported everywhere.

A lot of people argue that Bloomberg and his aides made the wrong choice, preferring one of the other two finalists, the Ford Transit Connect or the Karsan V1. But the real problem is that Bloomberg made the choice at all. Instead, the taxi buyers should choose, with their choice guided in turn by taxi passengers.

For as long as there have been taxis in New York City, there have been a variety of automobile models serving as cabs. Many New Yorkers remember fondly the Checker cab. But Checker, which stopped production in the early 1980s, never had an exclusive. It ran alongside the Dodge Coronet, the Chevrolet Caprice, the Peugot 505 and later the Ford Crown Victoria. Today, Hondas, Isuzus, Chevrolets, Fords, and Toyotas, among others, all serve as taxis.

As a regulator the city and its Taxi and Limousine Commission have always established specifications for taxicabs and then let the cab owners buy what they preferred. Of course, neither the city nor the TLC owns a single taxi. They are all owned privately by fleets or individuals. All are operated by drivers licensed by the TLC, but not employed by the TLC. The city and the TLC sometime forget that.

Given that taxis are privately owned and operated, it is very odd indeed for Mayor Bloomberg, one of the nations most successful capitalists, to order that every taxi owner buy the make and model car of his government’s choosing. It is as if the Securities and Exchange Commission held a contest to determine the best financial information terminal—and then required that every brokerage firm use the one it liked best. Somehow, I don’t think Bloomberg the businessman would cotton to this idea.

A lot of people who have weighed in think the city should have chosen an American company, Ford. Others rallied behind Karsan, which, while Turkish, said it would build its cabs in Brooklyn.

But the problem is not that the city chose badly, it’s that it should not be choosing. If Karsan makes an acceptable taxi, it should be an option for taxi buyers. The same is true of Ford—or Toyota, or Mercedes or Chevrolet. Cab owners will certainly have the best sense of what car models work best under the stress of being driven 12 or 24 hours a day, and of what design or designs taxi passengers prefer. If they are wrong, they can try another model—but not if the Nissan is the only choice. Of course, with an exclusive right to sell, Nissan will have buyers over a barrel.

The City Charter states that the TLC can regulate “standards for equipment safety and design.” But it says nothing about mandating a particular design. That’s not just the law: It’s also a good idea.

Just recently, the city tried to require (first directly then indirectly) that all taxis achieve a certain minimum miles per gallon. These efforts were held illegal by federal courts because it only the federal government, not municipalities, is allowed to regulate auto mileage. But now the city is turning around and deciding not just mileage, but shape, styling, and every aspect the taxi design—right down to the seat-coatings and the sound of the horn. It’s hard to see how this draconian top-down design command will pass muster.

But even if it’s legal, the “Taxi of Tomorrow” is a bad idea today.

The Latest Lawsuit Against the TLC

Another lawsuit against the TLC was filed today, this one challenging the TLC's hybrid cab rules, a program pushed by Mayor Bloomberg. The case is being prosecuted mainly by taxi fleet owners, not taxi drivers, who I have represented. The fleets say that the hybrid cars have nit been tested against the rigors of 24-hour driving on NYC streets. Legally, the major claims are that the TLC's rules regarding minimum mileage standards for taxi cabs are preempted by federal laws that mandate that only the federal givernment may regulate gas mileage standards. The lawyers on the case are from Emery Celli, a prominent civil rights firm that has some recent successes in strip search class action cases.

Given that NYC taxis drive almost exclusively in dense urban traffic, where a hybrid's advantage in mileage is most pronounced, why are the taxi fleets so adamantly against Mayor Bloomberg's plan? The answer is taxi economics.

While the taxi fleets (and other non-driving taxi owners) purchase and maintain cars, the taxi drivers pay for gas. So the fleets bear the costs of maintaining more expensive vehicles, which may be more costly to maintain, but the drivers get the benefit of better mileage. And the fleets have never much cared about drivers.

In stark contrast to the draconian programs that affect drivers, which have been enacted without any legitimate process, it is clear even from the complaint in the fleet's action that the TLC, in promulgating the mileage regulaitons, allowed for public hearings, notice and comment.