NYC Offers Incentives for Taxis to Increase MPG

LCT Magazine
Posted on November 14, 2008

Congressman Nadler and Council Member Yassky Introducing Federal and City Legislation to Increase the City's Ability to Enforce use of Green Taxis

Mayor Michael R. Bloomberg today announced a series of initiatives to increase the use of fuel efficient and environmentally friendly taxicabs, through new financial incentives and legislative initiatives.  The Mayor’s announcement follows a recent decision in Federal District Court that prohibited the City from mandating the use of cleaner, more fuel efficient taxicabs. The new program announced today offers financial incentives for taxi fleet owners to purchase fuel efficient vehicles and financial disincentives for the continue use of less efficient vehicles. The Mayor was joined at the announcement by Congressman Jerrold Nadler, Taxi and Limousine Commission (TLC) Chairman Matthew W. Daus, Council Member David Yassky, Richard Kassel of the Natural Resources Defense Council, Meir Yakuel, Co-Owner of the Yakuel Taxi Garage where the announcement was made, and Rati Sharma, a taxicab driver. 

 "Last month, we hit a speed bump in our efforts to turn New York City’s yellow cabs green when the courts upheld an archaic law, preventing us from reducing greenhouse gases and improving air quality," said Mayor Bloomberg.  "But one of the reasons we have been so successful over the last seven years is we do not let obstacles stop us from achieving our goals.  By offering incentives that will encourage more taxi fleet owners to purchase hybrids, we have found another avenue to reach our goal of greening our yellow cabs, improving our air quality, and reducing our carbon emissions.  I’m pleased that Congressman Nadler and Council Member Yassky are partnering with us on the legislative front, and I want to thank them for their support."

"The recent federal court decision to block the greening of New York City's taxis is, I believe, not in keeping with the original spirit of federal environmental legislation," said Rep. Nadler.  "Fuel efficient taxis don't simply represent a pie-in-the-sky futuristic luxury for New Yorkers but a present-day necessity which will produce a meaningful reduction in our city's carbon emissions.  Mayor Bloomberg’s leadership on this issue warrants our support.  I intend to introduce legislation in Congress to amend federal law - specifically the Clean Air Act and the Energy Policy and Conservation Act - in order to give states and localities the discretion to set stronger standards in exactly these types of circumstances.  Green taxis will be a win-win scenario for everybody."

"Our goal from the beginning was to get fuel efficient taxis on the road using whatever appropriate methods required to achieve our goal," said TLC Commissioner Daus.  "The new program will incentivize the purchase of cleaner vehicles, while ensuring taxi drivers are not penalized because a taxicab owner is reluctant to make the wiser purchase of a hybrid vehicle.  The 1,551 hybrid taxicabs already on the road have saved their drivers lots of money, while contributing to cleaner air.  This incentive package will help us take these advances to the next level, and help our city become a cleaner, healthier place."

"Greening the New York City taxi fleet is an absolute no-brainer," said Council Member Yassky.  "When we announced a green taxis rule earlier this year, New York instantly became a national leader in sustainability. It is astonishing and sad that the taxi industry is still putting up roadblocks."

"Because they save drivers money, cut pollution on our sidewalks, and reduce our dependence on oil, hybrid taxis are a win-win-win for New York City," said Richard Kassel, director of the Natural Resources Defense Council's Clean Fuels and Vehicles Project.  "It's time for Washington to update its rules so the City's hybrid taxi program can move forward."

Individual taxi owners have already begun to voluntarily upgrade to fuel efficient vehicles because of the substantial fuel cost savings.  The program unveiled today targets the fleet owners, who do not pay fuel costs and comprise approximately 25% of taxicabs in New York City.

Incentives and Disincentives

The purpose of the incentive and disincentive program is to encourage fleet owners to purchase fuel efficient cars, while holding drivers harmless for the decision of the fleet owners.

The TLC regulates "lease caps," the amount a fleet or taxi owner may charge for the use of a taxicab or medallion license.

The incentive program will allow fleet owners to increase the lease cap fee charged to drivers in fuel efficient vehicles by $3 per shift, which will offset the increased cost of purchasing a fuel efficient vehicle.  The driver, while paying the increased lease cap fee, will still see significant savings due to the reduced fuel costs, which he or she pays.  Taxicab drivers in fuel efficient vehicles achieve an average fuel savings of at least $15 per shift, which adds up to about $5,000 a year.

The incentive will generate approximately $2,000 per year, per vehicle for fleet owners.

To further incentivize the use of fuel efficient taxicabs, the TLC will propose to decrease the lease cap fee an owner can charge a driver by $12 per shift if the vehicle is a Crown Victoria or another non-fuel efficient vehicle, costing fleet owners approximately $8,500 per year, per vehicle.

The TLC will strictly enforce taxi leases to ensure drivers are not charged any additional fees by fleet owners.

The new lease caps will affect all taxicabs that are leased out for shift work, except accessible vehicles.

The new regulations will be presented for public hearing and vote at an upcoming public meeting of the TLC and phase-in options will be considered.


Congressman Nadler will sponsor legislation supported by the City that will amend the Energy Policy and Conservation Act to, at the very least, allow local governments to set fuel efficiency standards for the for-hire vehicles they license.

Council Member Yassky will explore City Council legislation that will examine reducing the required retirement age for Crown Victoria taxicabs and increasing the required retirement age for fuel efficient vehicles to further incentivize the use of fuel efficient vehicles.

Legal Strategy

The City will not appeal the decision made last month by Judge Paul A. Crotty in the United States Southern District.

In July, the City filed an amicus brief in the appeal of Green Mountain v. Vermont.  Later this month, the City will also file an amicus brief in California v. EPA.  The outcome in these cases could put to rest the ability of states and localities to set more stringent standards for passenger cars on their streets.  The States of California, New York, and Vermont along, with several environmental groups, are all parties in these cases. 

Approximately 13,000 yellow taxicabs operate in New York City everyday, including 1,551 fuel efficient taxicabs.


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