NASHVILLE -- Five months before Nissan is to begin rolling its yellow taxis onto the streets of New York City, the state's supreme court has ruled one element of the deal "null, void and unenforceable."
New York Supreme Court Justice Peter Moulton has ruled that cab companies must still be able to buy hybrid electric vehicles from companies other than Nissan as their taxis.
Until now, Nissan's highly prized contract with the city was virtually a monopoly, calling for Nissan's recently introduced NV200 compact to serve as New York's exclusive cab for the next 10 years. Moulton's decree opens the door for cab drivers and companies to buy non-Nissan vehicles as part of Mayor Michael Bloomberg's Taxi of Tomorrow concept.
Moulton ruled that in awarding the deal to Nissan, New York's Taxi & Limousine Commission did not meet a central requirement of its own bid specifications for the Taxi of Tomorrow. The city's specifications called for a "hybrid electric vehicle," and the NV200 is not a hybrid.
Nissan has promised New York a battery-powered, zero-emission electric version of the NV200 in future years. And court documents contain an assurance from Nissan that it plans to create a hybrid version in 2015. But that did not satisfy the court.
The commission is vowing to press ahead with Bloomberg's plan, and commissioners believe that a new set of rules they are proposing on hybrid taxis will soon straighten out the issue. The commission will meet on June 20 to propose new rules.
"This ruling will not delay the [Taxi of Tomorrow's] implementation," said David Yassky, chairman of the Taxi & Limousine Commission, in a prepared statement. "The TLC is acting to ensure that taxi owners will continue to have the option to purchase a hybrid vehicle, even once the ToT hits the road in October."
A Nissan Americas spokesman downplayed the impact of the court ruling, saying that it does not derail Nissan's lucrative contract, which is worth an estimated $1 billion.
"The NV200 taxi will continue as planned and launch in October," he said. Nissan is also in discussions with other major cities around the world about sourcing the NV200 as their official taxi.
Although the New York deal will likely only result in about 13,000 NV200 sales over the years, Nissan is also counting on the arrangement to showcase the Nissan brand to millions of New Yorkers and tourists every year.
Nissan launched production of the compact van, which is roughly the size of a Sentra, in Mexico earlier this year. It went on sale at Nissan's U.S. dealerships as a nontaxi commercial van in March. Previously it had been available in Europe.
The New York contract -- which has rankled some New York cabbies since it was inked last year -- would feature Nissan as the sole supplier of a single, passenger-friendly taxi model. The NV200 has been outfitted with copious rear legroom, transparent rooftops for sightseeing, cell-phone chargers, rear-seat air conditioning controls, reading lights and other features.
But the deal with Nissan has provoked a list of complaints and accusations by some New York cab companies, mostly directed against city officials. Among them: Nissan's see-through roof would prevent cabbies from selling roof-mounted advertising.
Moulton acknowledged the various grievances against the plan. But he said the only issue that concerned the court was whether the city's contract provided for a hybrid electric vehicle, and it did not.