Canceling Tomorrow Could Cost Big Bucks

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 report
Following 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.

Taxi of Tomorrow Held Legal

The so-called Taxi of Tomorrow got a legal green light from an intermediate state appeals court today, reversing an earlier trial court decision.  

Read the appeals court decision here.  

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 that 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.