Taxi of tomorrow has finally arrived: But is it too late?

In two earlier Travel Law articles [A Tale Of Two New Taxis (www.eturbonews.com (10/1/2014) and The Taxi Of Tomorrow Is Still In The Garage, www.eturbonews.com (5/6/2015)] we discussed New York City’s Taxi

In two earlier Travel Law articles [A Tale Of Two New Taxis (www.eturbonews.com (10/1/2014) and The Taxi Of Tomorrow Is Still In The Garage, www.eturbonews.com (5/6/2015)] we discussed New York City’s Taxi of Tomorrow program. After considerable litigation challenging the decision approving the Taxi of Tomorrow, the New York Court of Appeals in Greater New York Taxi Association v. New York City Taxi And Limousine Commission (the Commission), 2015 WL 3885462 (2015) has approved the Commission’s choice. This article will discuss this important decision.

Travel Law Update

Airline Collusion Investigation

In Drew, Airlines Under Justice Dept. Investigation Over Possible Collusion, nytimes.com (7/1/2015) it was noted that “Federal prosecutors on Wednesday said they had begun an investigation into possible collusion among the airlines to limit seating…In letters sent to airlines, prosecutors have asked for documents from the last two years related to statements and decisions they have made about limiting capacity on flight routes. By making it harder for passenger to find seats, airlines could restrain competition and increase fares”.

In Stout, Air Passengers Applaud a Justice Dept. Collusion Case, nytimes.com (7/2/2015) it was noted that “plenty of… passengers cheering the government on. After a wave of airline mergers, the once-struggling industry is enjoying an unusual period of profitability…And its success comes at a time when passengers’ ire is rising. Add-on fees for everything from bags of pita chips to exit row seats, ever-shifting luggage rules and increasingly crowded and cramped planes have left many travelers feeling powerless and infuriated. New profits of American carriers hit $12 billion last year”.

In Gurrieri, Airlines Hit With Price-Fixing Suit Amid DOJ Probe, law360.com (7/2/2015) it was noted that a consumer class action [DeVivo v. Delta Airlines, Inc. (S.D.N.Y.)] was filed in federal court in New York against four U.S. airlines alleging in the complaint that “This action arises from Defendants’ conspiracy to fix, raise, maintain or stabilize prices on airline tickets through a number of mechanisms including, inter alia, signaling one another how quickly they would add new flights, routes and extra seats in order to limit the capacity, and limiting access to competitive fare information to keep the prices of airfares artificially high”.

In Tillman, Airlines Face Antitrust Class Actions Over Price-Fixing Claims, nationallawjournal.com (7/7/2015) it was noted that another consumer class action was filed in federal court in the District of Columbia [Blumenthal v. American Airlines, Inc., Case No: 1:15-cv-01056 (D.C.D.C.)] alleging in the complaint that “Under the guise of the industry buzzword ‘capacity discipline’ Defendants have collusively caused domestic airline ticket prices to rise and/or remain at supracompetitive levels”.

See also: Maxon, Airline Biz Blog, Update: Airlines now face at least 15 antitrust lawsuits, aviationblog.dallasnews.com (7/9/2015) (listing of filed cases).

EU Flight Delay Compensation

In Forgoing compensation: US passengers give airline working hours and money, www.eturbonews.com (7/9/2015) it was noted that “US American airline passengers effectively give up one and a half workdays to airlines when they elect not to claim compensation. This is the result of a global comparison study conducted by compensation service provider refund.me at refund.me. Under EU regulation 261/2005 airlines are obligated to compensate customers in the event of delays, cancellations or re-bookings. Compensation ranges from 250 to 600 Euros depending on the nature of duration of travel disruption. Only ten percent of passengers are aware of their rights to compensation and a mere two percent apply for it”.

See our earlier articles on this subject : In Flight Delays: Stop Making Passengers Pay (ETN March 20, 2014) we discussed how three different legal systems required [European Union Regulation (EC) No. 261/2004 [EU 261] and Montreal Convention Article 19] or didn’t require [U.S. tariff system] airlines to compensate passengers for flight delays [with the exception of oversales or airline overbooking] concluding that EU 261 was the best and the U.S. tariff system was the least accommodating to the needs of delayed passengers. And in EU Regulation: Travel complaint handling, www.eturbonews.com (6/5/2014) we examined EU 261 more closely in terms of its application, compensation levels, its effectiveness during the period 2010 to 2012.

Cruise Safety Legislation

In New Senate Bill Introduced To Improve Safety at Sea, at internationalcruisevictims.org (7/9/2015) it was noted that new legislation “known as S. 1673…referred to as the Cruise Passenger Protection Act of 2015 (CPPA)” has been introduced in the United States Senate and features, inter alia, the following proposals, (1) Require vessels to integrate technology that can be used for capturing images of passengers and detecting passengers who have fallen overboard, (2) Improve medical standards aboard cruise ships, (3) Require on board sea marshals, (4) Give consumers a clear upfront summary of the restrictive terms and conditions in cruise contracts, (5) Establish a consumer complaints toll-free hotline telephone number, (6) Require the reporting of crimes against minors, (7) Strengthen video surveillance requirements in public areas, and (8) Establish a victim advocate to be the primary point of contact in assisting victims.

The Cost Of Defending Yourself

In Tourists who shot polar bear that attacked them fined $1230, www.www.eturbonews.com (7/15/2015) it was noted that “They were lucky to be alive after a polar bear broke into their tent on a remote Norwegian island and tried to maul them. But tourists who shot the animal three times with a revolver have now been fined nearly $1230 by the local government-because they failed to put a member of their group on ‘polar bear watch’”.

Amusement Park Verdict: $35 Million

In Six Flags Fights $35M Verdict, Says Site of Attack Wasn’t Its Responsibility, law.com/sites/articles (7/16/2015) it was noted that “Six Flags Over Georgia’s lawyer were at the Georgia Court of Appeals…hoping to persuade an appellate panel to toss the state’s biggest verdict of 2013. Before the three judges is a $25 million verdict awarded by a Cobb County jury to (Mr. X) who was randomly attacked by a gang in 2007 as he waited for a bus outside the theme park entrance. (Mr. X) sued Six Flags and four employees who were convicted of crimes from the attack. The jury held the individual defendants responsible for 8 percent of the award-with the remaining $32.2 million levied against the theme park”.

Travel Law Article: Taxi Of Tomorrow

Replacing The Iconic Checker Cab

In Greater New York Taxi Association v. New York City Taxi And Limousine Commission (TLC), the New York Court of Appeals noted that “Anyone reminiscing about New York City public transportation from the 1960s through at least the 1980s will probably evoke an image of Checker cabs driving residents and visitors through the busy City streets. Checker Motor Corporation made the iconic American taxicab that was valued by owners for its durability and was appreciated by passengers for its large rear seat and trunk space. That era came to an end when the last Checker cab was produced in 1982 and they were all taken out of service as New York City taxis by the late 1990s. Just as the Checker cab was the iconic taxi of yesteryear, the TLC sought to discover or create an iconic Taxi of Tomorrow (ToT). That process has led to the case that is now before us”.

Taxi Medallions

“In order to qualify as a taxi in New York City, a vehicle must carry passengers for compensation and be equipped with a taxi meter; it must be painted yellow and display a current TLC medallion, which indicate that vehicle is duly licensed to pick up passengers via street hails anywhere in the City…A medallion is required to operate a yellow cab, with the number of available medallions set by the State Legislature and the New York City Council…Most medallions are unrestricted although some are limited to wheelchair accessible vehicles or alternative fuel vehicles; an unrestricted medallion may be used for those types of vehicles as well”.

Lack Of Uniform Design

“With Checker-which is no longer in business-standing out as a notable exception, car manufacturers typically did not and do not design and produce vehicles with the intention that they be used as taxis. Instead, medallion owners would buy a passenger car meeting certain specifications and then ‘hack-up’ that vehicle by adding a partition, roof light and other required equipment that is strictly regulated by the TLC…The use of passenger vehicles is less than ideal because taxis are subjected to long hours and rough driving conditions, as compared with average passenger vehicles. Additionally, the use of hacked-up passenger vehicles may pose safety risks. For example, crash testing is completed on a vehicle model before it is hacked up, and the partition that is added after the crash testing may interfere with the inflation of side-curtain air bags during an actual collision”.

All Hail The Crown Victoria

“In the early 2000s, after passengers complained about insufficient leg room in vehicle models approved as taxis, Ford began making the stretch Crown Victoria…The TLC acknowledged that, for years, the Crown Victoria was ‘the only commercially available vehicle model that has complied’ with the taxi vehicle specs…That model became the most popular taxi vehicle, at one point comprising approximately 90% of the City’s fleet”.

Taxi Of Tomorrow Program

“The TLC commenced the ToT program in 2007, partly spurred by Ford’s announcement that it planned to discontinue the Crown Victoria. The process began with committees and public hearings, engaging all taxi industry stakeholders (drivers, medallion owners and passengers) with the idea of designing a vehicle that would be manufactured primarily for use as a taxi, rather than retro-fitting passenger vehicles for that purpose”.

Request For Proposals

“The TLC initiated a request for proposal in late 2009, seeking a manufacturer of original equipment to provide an innovative vehicle developed as a taxi, based on guidelines that included certain important qualities. The successful bidder would be awarded a 10-year exclusive contract for sales of this vehicle as the City’s official taxi. The TLC narrowed the seven bidders down to three models, sought public and industry opinion, and finally, in mid-2011, selected the Nissan NV200 as the ToT… With limited exceptions, the rules require each taxi owner to purchase an NV200 to replace an existing vehicle when it is retired”.

The NV200 Contract

“The Department of Citywide Administrative Services then entered into a Vehicle Supply Agreement (VSA) with Nissan. The VSA included the 10-year exclusive supply contract, provided the specs for the vehicle and set a minimum manufacturer’s suggested retail price, but no minimum. Nissan was also required under the VSA to furnish a wheelchair accessible version, that would be upfitted before delivery to any purchaser making that request and to create a hybrid version in the future. If a vehicle superior to the NV200 becomes available after five yeas, the TLC may provide notice to Nissan and terminate the VSA, unless Nissan modifies the NV200 or designs a new vehicle to match or exceed the specs of the superior vehicle”.

The Challenge

“The current challenge is limited to the TLC’s selection of one vehicle model as the exclusive gas-powered taxi eligible for use by taxi medallion owners…Petitioners allege that the regulations challenged here are beyond the TLC’s authority because they mandate a single gas-powered model as the City’s official taxi vehicle, rather than setting specifications that could potentially be met by other makes and models. Petitioners acknowledge that the TLC has the authority to enact rules with stringent specs that can only be met by one model at the time the rules are enacted. In addition, Petitioners do not dispute that the TLC has the authority to approve the use of a single vehicle model as part of a pilot project for limited periods of time…It is also undisputed that the City Council, itself, could enact a law limiting taxis to one model or could grant the TLC the authority to do so. Thus, the limited issue presented here is whether the TLC had the authority to require the use of a particular vehicle make and model as a taxi, as opposed to requiring taxi vehicles to meet certain specs, without the City Council explicitly specifying such authority, or whether the TLC intruded on the City Council’s domain by enacting the ToT rules”. “Given the broad statutory powers granted to the TLC to set policy as guided by enumerated safeguards and guidelines, the TLC did not exceed its authority or intrude on the City Council’s domain in violation of the separation of powers doctrine by enacting the ToT rules”.

Is It Too Late?

What the Court did not consider is the changing transportation environment in New York City with the recent increase in popularity of the ride-hailing companies Uber and Lyft together with the falling prices of taxis medallions [see Barro, New York Taxi Mogul, Seeking a Bailout, Says He’s Too Big to Fail, nytimes.com (4/10/2015)(“One of New York City’s largest taxi fleet owners is asking for a bailout…Prices peaked in 2013, not just in New York but also in other large markers like Boston and Chicago. Prices have declined as taxis have faced competition from car service apps like Uber. At the top, the price for New York mini-fleet medallions, which may be owned by nondrivers, was over $1.2 million”] and growing opposition from City Hall [see Flegenheimer & Fitzsimmons, City Hall and Uber in Struggle Over New York City Streets, nytimes.com (7/16/2015) (“For months the clash has seemed inevitable: the professed disrupters of municipal transportation policy and the chief executive of the country’s largest city government, tussling over who should rule the roads of New York City…the yellow cab industry, which includes some of Mr. DeBlasio’s most prolific campaign contributors, has pressured the administration to clamp down on Uber, a grave threat to owners amid the faltering values of the yellow-taxi medallion”)] both of which may discourage development, manufacture and use of the NV200. Stay tuned.

The author, Justice Dickerson, has been writing about Travel Law for 39 years including his annually updated law books, Travel Law, Law Journal Press (2015) and Litigating International Torts in U.S. Courts, Thomson Reuters WestLaw (2015), and over 350 legal articles. For additional travel law news and developments, especially in the member states of the EU, see IFTTA.org.

This article may not be reproduced without the permission of Thomas A. Dickerson.

Read many of Justice Dickerson’s articles here.
http://www.nycourts.gov/courts/9jd/taxcertatd.shtml/

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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