|Three years ago, Nissan was awarded an exclusive contract by New York City to build a “taxi of tomorrow” to replace the city’s hodgepodge fleet. But the rollout has been plagued with legal challenges from the start, and it’s unclear if Nissan will be able to salvage the deal.
Nissan is indicating that it will be relaunching the taxi, the NV200, in the next few weeks.
Under the original contract, 100% of the taxis sold for use in NYC over the next 10 years would be NV200s.
But a number of legal setbacks since the initial release last year have left the market confused as to whether taxi companies must buy the vehicles. There are only about 500 of them on the streets currently.
“It’s been crazy,” Alex Chaoush, taxi sales manager for Koeppel Nissan in the Jackson Heights neighborhood of Queens, told Automotive News. “The vehicle is great. But it’s been mired in politics. We’ve sold hundreds of them this year. But we’d be selling thousands of them by now if things had gone like they were supposed to.”
When everyday consumers go to buy vehicles, they have hundreds of models available as options. And since drivers choose used cars over new ones at a rate of 3.3 to 1, those choices are even further expanded.
NYC taxis are far more strictly regulated, even though they’re bought by private investment companies. According to Alex Taylor III of Fortune magazine, there are currently 16 models approved for use as NYC taxis. Generally, these models (including the Toyota Camry and Prius, Ford Escape and Hyundai Santa Fe) are bought from regular New York car dealers and then retrofitted with partitions and fare meters.
Legal action by the Greater New York Taxi Association, a group representing about a third of the city’s taxi owners, alleges that it’s unfair to so severely constrain cab choices. They claim that taxi owners will be hurt by not being able to seek out competitive pricing.
“Why can’t we have competition?” Ethan Gerber, a Brooklyn attorney who represents the taxi association, asked. “Why did the city think there had to be exclusivity? It stifles competition and stops innovation. Why couldn’t we just have standards for the taxi, and if Toyota and Ford wanted to offer an identical vehicle that might be somehow better or more competitive, why can’t they?”
Innovating for the Future
In the midst of all this, major metropolitan areas like New York and Chicago are hustling to find better-regulated answers to the demands of young, tech-savvy users. New York is considering a mobile app that will allow smartphone users to hail cabs.
This has become increasingly important as companies like Uber and Lyft challenge traditional taxi services.
“Though there are critics of both companies after some high-profile scandals about safety, user privacy and shady tactics, their significance is in forcing change in the industry is undeniable,” Michelle FlorCruz wrote Dec. 13 for the International Business Times.
So what’s the future for Nissan’s “taxi of tomorrow” as legal confusion mars the impending relaunch? According to Taylor, it “now has only a slim chance of becoming a taxi of today.”