Tim Rose brings his expertise to next year’s highly anticipated event.
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.”
Corporations based in NYC have asked the TLC to adopt this as a citywide rule, Daus said. They would rather this be a mandate than an issue that has to be worked out in contracts with transportation companies. Clients have not asked for “green” cars, Mackasek said, but have been interested in whether Valera Global has been taking actions to improve the environment. “We’re the only chauffeured transportation company to join the Chicago Climate Exchange,” he said. “This program helps us offset our carbon footprints, which we share with clients.”
Commonwealth Worldwide Chauffeured Transportation also promotes its program that benefits the environment, President/CEO Dawson Rutter said. “We run an office recycling program with paper, bottles, and cans,” he said. “We use energy-efficient light fixtures, and a very efficient heating and air-conditioning system.”
While Commonwealth operates in New York under the “luxury limousine” category, the company is looking carefully at hybrid vehicle options. The company has six hybrid and alternative fuel vehicles in its fleet. The company is considering the Toyota Highlander hybrid, but doesn’t know if clients would be happy with the small Toyota Prius. “It’s difficult in terms of satisfying clients on the types of vehicles they want,” Rutter said. “The Prius holds fewer people than a Town Car. We have to look at total vehicle emissions compared to the average number of passengers who can ride in a car.”
Rutter believes that Mayor Bloomberg and the TLC have done a good job introducing these new policies into the city. “They’re bringing in banks to lower the financing,” he said. “I’m not worried about a financial crisis happening. But how often batteries need to be replaced in hybrids — that could be a problem.”
With 70% of its clients in the entertainment industry, Attitude New York clients have been clamoring for environmental upgrades, owner Jeff Rose said. “This is why my company has purchased vehicles such as the Lexus LS 600 hybrid sedans and controlled our lighting and heating in the office.”
Like other chauffeured transportation companies, Attitude New York is exploring alternative-fuel vehicle options, including a hydrogen-powered car, the BMW Hydrogen 7. Rose also wonders how TLC regulations will affect limousines in the long run, and if major coachbuilders such as Krystal Enterprises and Royale Limousine Manufacturing will need to take legal action with the city at some point.
Joe Cirruzzo, Sr., president of A Elegant International Limousines, based in Staten Island, N.Y., worries about how the changes being implemented by the TLC will affect the industry — especially if other government agencies adopt similar plans. “This could escalate to other cities and states,” he said. “Westchester County has followed New York City in the past. This could also happen in Connecticut and New Jersey.”
He’s also concerned that other vehicles in chauffeured transportation fleets could be pulled into the TLC regulations. “Limousines could be enrolled, and maybe SUVs,” he said. “It’s not clear yet.”
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