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NEW YORK CITY — Companies serving this market that are considered “luxury limousine” are relieved to not be in the “black car” category. The question is: Will the luxury limousine category be included in the city’s mandate for increased mileage?
“There is no current plan to extend this program to limousines,” said Matthew Daus, commissioner/chair of the New York City Taxi & Limousine Commission (TLC). “We are considering the livery (community cars) category.” Livery/community cars are usually high-mileage Lincoln Town Cars.
If the TLC adopts the proposed rules, companies registered under the “black car” category can only buy vehicles that are 25 mpg or higher starting Jan. 1, 2009. This will increase to 30 mpg at the beginning of 2010. Current fleet vehicles will be phased out and replaced with higher mileage vehicles. (As of press time, the TLC was expected to adopt these new regulations during its monthly board meeting on April 17.)
Companies in the “luxury limousine” category are concerned that these new rules will be extended to them, and that their practice of selling used Town Cars to “black car” operators will be taken away. The luxury limousine category includes nearly all companies active in the limousine business that serve the New York market, and that typically belong to NLA and are active at LCT events. Two major companies are active in the limousine business, but are registered under the “black car” category: Town Car International and Valera Global. Town Car International was consulted by the TLC as it created a draft proposal called “Black Car Initiative.”
Valera Global, which used to operate under the name Computer Car, has evolved over the years and has become more like luxury limousine companies, CEO Robert Mackasek said. “Companies in the black car segment are supposed to have $300,000 per vehicle single limit liability coverage. Our company now has $1.5 million per vehicle. But we’ve never changed the paperwork and gotten out of the black car category.”
The proposed TLC rules recommend that operators purchase hybrids to meet the 25 mpg standard, but operators do not have to buy hybrids in order to meet the 25 mpg standard. Since the only non-hybrids that get more than 25 mpg are small cars, hybrids most likely will be purchased. Town Cars get 15 mpg in the city (and less mpg if older cars), and nearly all the NYC “black cars” are Town Cars.
Since “black car” operators tend to buy two-to-three year old Town Cars at a discount price, purchasing brand new hybrid vehicles that get 25 mpg will generally cost more per car. The city is working on a financing program that will reduce costs on the new vehicle purchases.
“Black car companies buy two-to-three year old Town Cars at about half the price of new ones,” Daus said. “This is very common. Purchasing new hybrids will be more costly. That’s why the TLC is currently working on financing alternatives for members.” The city is also working with the state legislature to exempt the city sales tax for hybrid vehicles, according to the TLC’s Black Car Initiative. “This represents about 50% of the overall sales tax cost for black car owners: 4% out of 8.375%,” the initiative states.
Like other ground transportation companies operating in New York City, Valera Global is looking carefully at hybrid vehicle options, including the Toyota Camry hybrid. “The Camry is possible, but it’s a front-wheel-drive vehicle,” Mackasek said. “Most hybrids are front-wheel drive. We believe this would increase maintenance costs and battery replacement.”