Annie sang: “Tomorrow, Tomorrow, you’re always a day away!”
And so it is with the Taxi of Tomorrow.
The planed rollout has been delayed again by a ruling by the New York Court of Appeals. The court, the state’s highest, granted a stay in a continuing appeal over the vehicle.
The puts efforts to phase in the Nissan NV200 as the only acceptable New York yellow taxi on hold while the court decides an appeal brought by a a prominent taxi owners group. The NYC TLC had April 20 as the date after which most taxi owners would have to switch to the new vehicle when they retire their cabs.
The Greater New York Taxi Association has opposed the NV200, arguing that the Bloomberg administration exceeded its authority by trying to force drivers to buy a certain vehicle. Traditionally, the TLC had established standards for taxicabs, but allowed any car that met those standards to be used as a yellow cab. The TLC’s long-delayed plan does not apply to livery cabs or black cars, which now outnumber yellow cabs.
An interesting autoblog post details the history of legal and business problems behind the Taxi of Tomorrow. It’s set to be litigated again in the New York Court of Appeals, the state’s highest court, which granted the taxi industry group leading the opposition to the Nissan vehicle the right to appeal.
Opposition to the T of T is summed up nicely by Ethan Gerber of the Greater New York Taxi Association, who says, “Look, Nissan is a good company. And the NV200 is not a bad car. If it turns out that people like it, then great – they should be able to sell them here. But why can’t we have competition? Why did the city think there had to be exclusivity? It stifles competition and stops innovation.”
A mid-level New York appeals Court has given taxi owners permission to bring their challenge to the Taxi of Tomorrow program to the Court of Appeals, the state’s highest court.
The ToT would require most cab owners to purchase a taxi made by Nissan Motor Co. Traditionally, a taxi owner could use any car that met TLC specifications.
The plan has been challenged by the Greater New York Taxi Association and others, which claimed that the commission could not force taxi operators to buy specific vehicles. Last October, a state supreme court justice said the TLC overstepped its authority in requiring purchases of the NV200, but an appeals court reversed the ruling. The order today allows the state’s highest court to decide, probably early in 2015.
Mayor Bill de Blasio has he indicated he might cancel the Taxi of Tomorrow program even if the city continues to prevail in court. But doing so could cost the city as much as $100 million, according to a capitalnewyork.com reportFollowing a lengthy competition, in 2011 Mayor Michael Bloomberg agreed to give Nissan near-exclusive rights to supply yellow taxis for New York City Streets. Its winning design was the big and ugly, but feature-rich NV200, which sports amenities like back-seat airbags, moon roofs, phone-charging ports and passenger reading lights.Nissan apparently claims that developing the vehicle cost Nissan about $100 million, and that the city would be on the hook for that sum. De Blasio, as public advocate, opposed the Taxi of Tomorrow on the grounds that Nissan had investments in Iran and that the vehicle was not wheelchair-accessible– which is now even more awkward nowadays in that the city has also promised to make half of the city’s taxis wheelchair friendly. Taxi fleet owners, who gave hundreds of thousands of dollars to the mayor’s campaign have battled the program in court, first successfully, but lately unsuccessfully. That battle could continue if the mayor decides to proceed with the program. Presumably, if the NY Court of Appeals, which may have the last word, decides that the program was unlawful after all, the city would no longer own Nissan for canceling the deal.
According to BloombergBusinessweek report, the Appellate Division ruled that the Taxi of Tomorrow program is a “legally appropriate response to the agency’s statutory obligation to produce a 21st-century taxicab consistent with the broad interests and perspectives that the agency is charged with protecting.” Judge David B. Saxe wrote the majority opinion. That there was a dissent by Judge Acosta makes an appeal to the New York Court of Appeals more likely.
Nissan won a contract with the city in May 2011 that allowed it to be the sole maker of NYC taxis, a deal valued at $1 billion over 10 years.
Taxi fleet operators sued the city in December 2012 on the ground that the TLC had the authority to issue standards, but not to designate a particular vehicle. A judge halted the program five months later. The city subsequently revised its rules to allow for more hybrid vehicles, something the TLC had previously advocated. The Nissan vehicle is not a hybrid, yet the TLC made it mandatory.
But in today’s ruling, the court wrote: “Where an agency has been endowed with broad power to regulate in the public interest, we have not hesitated to uphold reasonable acts on its part designed to further the regulatory scheme. Here … far-reaching control has been delegated to a commission charged with implementing a pervasive regulatory program. This far-reaching control granted to the TLC by the New York City Charter gave the agency full authority for its actions.
Judge Acosta said in dissent th
at the commission exceeded its authority, “regardless of whether the Taxi of Tomorrow project is rational and consistent” with its objectives, because it mandated the exclusive use of a specific make, model and manufacturer.
The T o T was a darling of the Bloomberg administration. The new mayor, Bill De Blasio, has decidedly different views about the taxi industry so it remains to be seen whether the city and the TLC will seek to revive the program.
As has been widely noted by now, the TLC’s “Taxi of Tomorrow” regulation has been invalidated by a New York State Supreme Court justice with the improbable name of Shlomo Hagler. Article on the ruling are here, here, and here.
The case is called Greater New York Taxi Ass’n, et al. v. New York City Taxi and Limousine Commission Limousine Commission, et al., 101083/2013 (October 8, 2013). The ruling invalidated the “Taxi of Tomorrow” program on the grounds that the regulation exceeded the TLC’s statutory authority and that in enacting the regulation the TLC violated the separation of powers doctrine.
The Taxi of Tomorrow regulation would have mandated that medallions owners purchase a specific make and model of automobile (the Nissan NV200) that had been designated by the TLC as the Official Taxicab Vehicle. It was enacted after substantial public discussion, an online poll as to the public’s preference and formal notice and comment in September 2012. After an earlier ruling invalidated part of the rule on the ground that it did not permit the use of hybrid taxis, the rule was amended. Now the the entire program has been thrown out.
The court analyzed whether the TLC had been delegated authority to enact such a rule by its enabling statute, the City Charter. In its review, the court found that “the purpose of the TLC was clearly defined” and that the Charter “enumerated authority to set ‘standards of service, standards of insurance and minimum coverage; standards for driver safety and design; standards for noise and air pollution control; and to set standards and criteria for the licensing of vehicles, drivers and chauffeurs, owners and operators engaged in such services.’” The court then concluded that the power to compel medallion owners to purchase a specific automobile does not exist in the City Charter.
The court further found that the TLC rule unlawfully impinged on the authority of the City Council to mandate the type of cars that could be used as taxis (if there was to be such a mandate at all). The TLC was not exercising a “typical administrative ‘interstitial’ rule-making function” such as its historical role of setting technical standards for taxicabs. Instead, it wrote on a clean slate, “creating its own comprehensive set of rules without benefit of legislative guidance.”
This is just the latest effort by Mayor Bloomberg and his (theoretically independent taxi commissioners) to dictate the type of vehicle that taxi owners might purchase. First, the mayor tried to force the industry to buy hybrid vehicles, not in so many words by through a minimum gas-mileage regulation. That ruling was held invalid on the grounds that only the Congress could dictate gas mileage. Then Bloomberg pushed through the Taxi of Tomorrow, which ironically would have prevented the use of hybrids.
The city has said it will immediately appeal. But for now, we are back to the traditional regime, where, in Justice Hagler’s words the New York City taxi fleet “comprised various makes and models of
vehicles made by different automobile manufacturers. These makes and models were then modified or ‘hacked-up’ for use as taxis.” The TLC set the specific standards for cars that could be employed as taxis and the medallion owners were given the freedom to purchase any make or model of vehicle from any manufacturer who met those standards.
Only recently has the TLC decided it was smart enough to design cars. But it seems it was too smart by half. Nissan, meanwhile, says it will still roll out the NV200
, and that it’s a great car. Maybe so, but without its state-mandated monopoly, it will be a tougher sell.
Opponents of Mayor Bloomberg’s Taxi of Tomorrow project filed suit to block the initiative Wednesday, with just months before the first of the new Nissans are to supposed to hit the New York City streets.
The Wall Street Journal reports that the case was filed by the Greater New York Taxi Association, which is the smaller of two fleet owner group, and Evgeny “Gene” Freidman, who recently got into a shouting match with Bloomberg, or so it has been reported at Madison Square Garden. The suit filed in state court in Manhattan charges that the plan to force virtually all yellow taxi medallion owners to purchase a single vehicle oversteps the mayor’s authority under the law.
Freidman’s real issue is that he is the largest owner of hybrid cabs and hybrid cab medallions. He likely wants to assure that his favored vehicles will remain taxi street legal, Even though the TLC has said it will allow exceptions for hybrids, Freidman’s cabs could be overshadowed by the the “Tomorrow” cabs, that is if tomorrow ever comes.
Freidman appears to be relying on a a decision issued just yesterday that upheld the striking down of Bloomberg’s ban on big-gulp sodas.