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Nissan, N.Y. clear hurdle as appeals court validates taxi pact

Nissan has been been distributing the NV200s in New York through dealers since October 2013. Photo credit: LINDSAY CHAPPELL

(Bloomberg) -- New York’s plan for a new fleet of cabs from Nissan Motor Corp. is legal, an appeals court ruled, overturning a judge who said the city’s Taxi and Limousine Commission overstepped its authority by requiring owners to buy a specific vehicle.

The so-called 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,” Justice David B. Saxe wrote in an opinion for the appeals panel in Manhattan today.

Nissan won a contract in May 2011 valued at $1 billion over 10 years to supply more than 15,000 minivans, which feature sliding doors, more luggage space and airbags in the back, for the city’s taxi fleet.

The commission in September 2012 designated the Nissan NV200 as the official “Taxi of Tomorrow” and required owners of medallions, which confer the right to operate yellow cabs in New York, to buy the $29,700 vehicle.

Taxi fleet operators sued the city in December 2012 seeking to block the requirement, and a judge halted the program five months later, saying it violated the administrative code because it didn’t allow an option for medallion owners to buy a hybrid vehicle. The city then revised the rules to let medallion owners buy hybrids until Nissan develops a hybrid version of the NV200.

Exceeded authority

The operators sued again in July, and a judge blocked the plan from going forward, saying the commission exceeded its authority under the city charter by requiring the purchase of a specific vehicle.

Appeals court Judge Rolando D. Acosta in a dissent said 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.

Nissan said in a statement that it’s pleased with the court’s ruling, which means that it has exclusivity with respect to New York City’s non-hybrid taxi market. The company said it’s been been distributing the NV200s through dealers since October 2013.

Crash testing

“Given the specific NYC taxi research and development that Nissan conducted - including crash testing with the installed partition - we are confident that the Nissan NV200 taxi will provide a solution that is optimal in safety, comfort and convenience for passengers and drivers alike,” the automaker said in a statement.

The city’s Law Department and Mayor Bill de Blasio’s office didn’t immediately respond to a request for comment on the ruling. The taxi operators also didn’t immediately respond to a request for comment.

De Blasio, who received more than $200,000 in taxi-industry donations during his campaign, said before taking office that he opposed the plan because not all cabs would be wheelchair-accessible. The proposal calls for about 2,000 of the taxis to be fitted for disabled riders.

De Blasio said in a letter to the taxi commission in 2012, while he was public advocate, 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.” A spokesman for De Blasio said in October that he was evaluating the ruling blocking the proposal from going forward.

Taxi plan

In March, De Blasio named Meera Joshi, who helped lead the ‘Taxi of Tomorrow’ plan for the administration of former Mayor Michael Bloomberg, to head the taxi commission. Joshi was the former TLC general counsel.

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, former TLC commissioner David Yassky said in 2012. Current taxis are built by nine manufacturers, and the fleet was dominated by Ford Motor Co.’s Crown Victoria, which the company stopped making.

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