Nissan's Billion-Dollar New York Taxi Cab Deal Keeps Stalling

Dec 15, 2014 11:03 AM EST | Jordan Ecarma

Nissan's billion-dollar deal to supply New York City's staple yellow taxi cabs once seemed like a coup for the Japanese automaker, but it hasn't exactly been smooth sailing for the NV200 cab that Nissan designed specifically for the city.

Three years have passed since the carmaker won an exclusive contract to supply all taxis sold in New York in the next decade, but various setbacks have kept the NV200 from becoming a common sight in the city, Automotive News reported. Of New York's 14,000 or so cabs, only around 500 are Nissan's special make.

Nissan is reportedly planning to relaunch its New York taxi initiative as it looks to grow in the commercial vehicle segment. The carmaker is a major player in the commercial truck market worldwide, but it hasn't yet gained a footing in North America.

One blockade for Nissan's New York cab monopoly is a two-year-old lawsuit from the Greater New York Taxi Association, which purportedly represents a third of the city's taxi owners.

In October, New York state's Court of Appeals agreed to hear the lawsuit accusing the city of overstepping boundaries in striking the deal with Nissan. The lawsuit claims that the lack of competitive pricing will hurt taxi owners; that the city had no legal right to award the contract to Nissan; and that the specially designed NV200 is "unproven."

Another count against the cab design, according to the suit, is its panoramic moonroof intended to give tourists a better view of the city skyline, a feature the taxi association claims is unsafe.

The NV200 costs around $31,000, including shipping; in contrast, it costs about $22,000 for a driver to get a Toyota Camry to retrofit as a taxi cab.  

"But why can't we have competition?" asked Ethan Gerber, a Brooklyn attorney who represents the taxi association, as quoted by Automotive News. "Why did the city think there had to be exclusivity? It stifles competition and stops innovation. Why couldn't we just have standards for the taxi, and if Toyota and Ford wanted to offer an identical vehicle that might be somehow better or more competitive, why can't they?"

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