The Official New York City Taxi


This research paper on the “The taxi of tomorrow”: a public survey of the expected interaction between the new official New York Taxi and the passengers covers the following areas.

“The taxi of tomorrow”: a public survey of the expected interaction between the new official New York Taxi and the passengers.

Background of the study

After two years of deliberation, the mayor of New York City, Michael Bloomberg, announced on May 3, 2011, that the “taxi of tomorrow” will be Nissan’s NV200 model. This is after the Nissan North America Inc, worn the tender to be the exclusive manufacturer and supplier of the taxi cabs for the city for the next ten years from 2013. This was chosen after it met most of the priorities for safety and efficiency categories identified by the 23000 people surveyed. The Nissan NV200 van has already been in use in most Asian and European markets for its comfort that rhymes well with urban features.

It won against contenders such as Karsan from Turkey which had presented a stylish, amenity-laden design, but was dismissed for the reason that it has no experience in the American market. Ford Motor Co. which supplies the current Crown Victoria had submitted a Transit Connect van, which the selection committee dismissed as problematic and uninspired. The Nissan model is expected to come into the market in late 2013 with 13,000 cabs and will gradually replace crown Victoria on a more widespread basis with a retail price of $29000 (Green Car Congress, 2011).

For New Yorkers, taxicabs are a subject they debate with a lot of passion and since their introduction in 1907, it has elicited a lot of controversy attracting mayoral commissions and City regulatory reforms (Mathew, 2008). This is mainly because for a large part of the often prominent New Yorkers, a taxi is an everyday life encounter. It is estimated that cabs offer transport to 11% of all fare-paying passengers using a taxi, bus, subway, car services or black car in the city and about 25% of people going to or from Manhattan. Further, an estimated 30% of all fares paid by passengers around New York for the above transport forms are from taxicabs and 45% for fares paid for trips within Manhattan (Shaller Consulting, 2006).

To the public, the face of taxicabs is the driver since he/she is the one they are in contact with and other parties such as taxi regulators and owners are people they hear about in the media. The drivers are then viewed by the public either as hardworking immigrants trying to earn an honest living or foreigners that have little knowledge of the English language and often cannot find their way around the city, overcharge and abuse passengers among other things. The later picture is repeatedly portrayed by the media in powerful displays of cab drivers’ misdeeds (Grynbaum, 2011).

Statement of the problem

The TLC and other stakeholders have put a lot of effort to uplift the standards of taxicab services. This has seen newer vehicles on the roads, high driver experience, and earnings which would essentially mean a high-quality service and satisfaction from the cab users than other modes of transport but this is not the case. All this highlights an important public policy issues to be addressed: what is the expected response to the new Nissan NV200 taxi by the New York riding public. Does it meet the desires and needs of these passengers as it is in the ‘Taxi of tomorrow’? This paper tries to explain what New York passengers consider priorities in the taxi of tomorrow.

Purpose of the study

This study aims to;

  1. Establish what New York riding public considers quality taxi service and whether they are getting it
  2. Identify what New York riding public considers the top four priority expectations of the ‘taxi of the future,’
  3. Establish the public opinion on the choice of the Nissan NV200 as the ‘taxi of tomorrow,’

Specific research questions

  1. How frequently do New Yorkers ride in a taxicab, for what purpose and why
  2. What do New York riders consider quality taxi service and are they getting it,
  3. What do they consider the top four priorities in what they would expect of the taxi of the future,
  4. What is their opinion on the City Authorities and Taxi and Limousine Commission’s choice of the Nissan NV200 as the taxi of tomorrow,
  5. What would they want to see different in taxicab services in the future

Literature review

History of taxi cabs in New York City

The yellow taxi cabs of New York City are a distinctive feature of the city. These cabs are operated by private companies that must be licensed by the New York City Taxi and Limousine Commission which is an agency of the government. Besides the yellow taxis, the commission also regulates other more than 40,000 vehicles for hire which include ‘black cars’, commuter vans and ambulates. The $1.8 billion taxi industry serves about 240 million passengers per year and plays a vital role in the city’s transportation network besides being the key ground carrier connecting Manhattan and the LaGuardia Airport and a significant share of John F. Kennedy International Airport (Shaller Consulting, 2006).

Taxicab industry began in New York City in 1907 when an entrepreneur, Harry Allen introduced a sixty-five car fleet which he had imported from France and which used gasoline. These provided faster services and fares were determined by mechanical meters. These vehicles were positioned around major hotels and they replaced horse-drawn hansom cabs. Soon Harry Allen expanded his fleet to 700 cabs but in 1908 a bloody strike by his drivers led to his bowing out of the industry.

The industry grew to 15000 cabs by 1923 with other companies operating them such as the Checker with 3,750 taxis, Yellow Company with 3000 and the National Transportation Company with 1,500 cabs. These companies also operated taxi fleets in other cities such as Chicago, Kansas City, and Philadelphia. It is, however, John D. Hertz who introduced the yellow print on cabs after he read in the University of Chicago study that yellow color is more visible from far than any other color.

During this time, only the relatively wealthy could afford a cab fare since it was 50 cents per mile. In the 1920s automobile manufacturers realized the potential in this business with companies such as General Motors and Ford Motor Company bringing their fleets on the streets. It is, however, Checkered Cab Manufacturing Company established by Morris Markin that become the most popular service provider with its yellow and black taxis and has been the most recognizable symbol of the city for many years (Schaller & Gilbert, 2005).

The 1920s and 1930s brought many players in the taxi business in the city which eventually resulted in an influx of taxis. This resulted in traffic congestion, fare cutting wars, reduced driver wages, vehicles that did not meet all the safety standards in insurance and other illegal activities. This situation was not helped much by The Great Depression which increased unemployment and other economic crisis. It was clear that a regulation of the industry was imperative to curb activities such as cheating, fare hustling, stealing and extortion among others. The industry was put under police control in 1925 (Shaller Consulting, 2006).

In 1937 two major events happened that were meant to put some sanity into the industry. First, the City Board of Aldermen established an ordinance, The Haas Act, which put a cap on the licensing of new taxis. The outstanding licenses were 13,595 and a freeze was put at this number joining other cities such as Chicago, Baltimore, Boston, and Philadelphia among others in Taxi license caps which were not increased for more than 50 years by most of these cities. Secondly, the Transport Workers Union was recognized and succeeded in negotiating a contract with 28 fleets before it collapsed after two years. The Haas Act cap was only reviewed in 1945 in the post World War II era and only to issue nontransferable Medallion licenses to war veterans who surrendered their medallion (Mathew, 2008).

In the 1950s and 1960s taxis were required to be large enough to carry five passengers and a trunk with a luggage rack with a grill however small vehicles were allowed in 1954. During this time also demand for taxis grew but the cap was still on forcing drivers to work long hours. The industry could not meet the transportation needs due to the license cap leaving some parts of the city un-serviced. Drivers concentrated on the Manhattan area which accounted for 77.7% of all their trips in 1963 (Shaller Consulting, 2006) with Brooklyn, Queens and the Bronx left without cab services.

The police department’s Hack Bureau conducted evaluations on Taxi use regularly in the 1960s. It is on this basis that when the Haas Act authorized issuance on new licenses that the police argued there was no need for new licenses and the provision canceled in from the city law in 1971. It is during this time that neighborhood car services or liveries started operating in the un-serviced neighborhoods which were not regulated by the city government.

This brought a lot of conflict within the transportation industry as taxi companies claimed that the liveries were unsafe, uncontrolled and infringed on the taxis rights. The elected officials, on the other hand, argued that the liveries were community initiatives and met a need in those communities. Despite all these conflicts, liveries grew rapidly and the taxi and liveries industry matched the pre-depression numbers leading to the establishment of the Taxi and Limousine Commission (TLC) in 1971 by the City Council which eventually gained jurisdiction over “for-hire vehicles” in 1987 (Mathew, 2008).

In the 1970s taxi business was greatly affected by the economic recession with about 75% of taxi fleets which controlled, 6,800 taxi cabs going out of the business and selling their medallion licenses to individual, nonunionized drivers. This reduced the number of taxi cabs in New York City and also the prices of medallions to around $10,000 in 1971. This led to the emergence of “mini fleets” consisting mainly of two cabs and two cab drivers who acted as partners and which by end of 1979 dominated the cab industry with 9,400 cabs out of the 11,787 in business. It is during this time also that TLC overturned a prohibition on “horse-hire” to allow leasing of taxis to drivers (Mathew, 2008).

The 1960s also saw the rise of serviced cabs where some taxi owners formed radio associations to make telephone prearranged picks to customers. Taxis with radio services increased steadily with 1982 registering 13 radio associations linked to 3,200 cabs. Businesses maintained accounts trips with radio associations which were serviced especially in the evening when workers were going home. The radio work was more preferred by these cabs as it provided a steady flow of business and also prearranged trips were safer than pickups.

This eventually became a problem for customers hailing cabs from the curb as most of them would have “on radio call” sign. The TLC addressed this problem by moving radio call cabs from medallion to nonmedallion category with the first ones implementing this in 1982 and in 1987 the separation of radio cabs from the yellow ones was completed in March 1987. Radio cabs owners leased or sold their medallions out and bought luxury black cars and began servicing the business community. The black car business grew rapidly and in 1990s 8,000 cars were licensed and in 2005, 10,400 black cars were in operation (Shaller Consulting, 2006).

In the early 1990s, the council approved 400 new medallions as a way of raising money for the broke council. This was an about-turn for the council and TLC since in 1987, the City Council had approved legislation allowing TLC to offer more licenses but after an Environmental Impact Statement (EIS), only 400 new medallions could be issued to maintain clean Air regulations which TLC refused. In 2004 after an EIS by TLC, 900 more medallion licenses were issued in a series of auctions. This drove the prices of a medallion to $392,900 for a corporate license and $339,300 for individual medallion. New categories of medallions were introduced with accessible vehicles going for $275,300 and alternative fuel medallion fetching $$222,700 (Mathew, 2008).

TLC and taxi industry stakeholders have reviewed regulations aimed at upgrading taxi cab services since the 1980s. Some of these regulations include rising of insurance coverage, requirement that only new cars can be put into taxi service, replacing the cab after 3-5 years of operation, three compulsory vehicle inspection per year, driver training, English language requirement, revoking of licenses of drivers who regularly violated traffic and TLC rules, trouble lights and capped lease fees among others (Schaller & Gilbert, 2005).

Taxi and Liveries industry has continued to remain a vital part of New York City transportation in the 21st Century whereby 2006 the industry commanded 46,000 vehicles as compared to 1992 39,000 vehicles. This has also seen newer vehicles on the roads, high driver experience and earnings which would essentially mean a high-quality service and satisfaction from the cab users than other modes of transport but this is not the case. TLC now require cabs to accept credit and debits cards as means of payment, have monitors to show customers of where they are and location tracking devices to be able to recover lost items. This has challenged the designers and auto manufacturers to come up with prototypes that will meet these standards (Hodges, 2007).

Taxi of tomorrow

This is a project that started in 2007 after the New York City official gathered together a group of the industry stakeholders including taxi driver, owner, and passengers’ representatives. The gathering aimed to outline the goals for the next taxicab an undertaking they dubbed the Taxi of tomorrow. After the agreement on what the taxi of tomorrow required, a proposal was floated for manufacturers and designers to tender their best ideas for the next taxicab for the city which would be purpose-built (New York City Government, 2011).

The two-year procurement process was geared to pulling together the combined purchasing power of the taxi industry to manufacture a higher quality taxicab that will provide passengers and drivers with increased safety and comfort during the ride and also offer other amenities not available in the current ones. An evaluation of the proposals consisted of two categories. The first one was on the ability of the manufacturer to meet various aspects of the agreement and the second one focused on the qualities of the model that will improve the interaction of the cab with the passengers and operators. The overall qualities the evaluators looked at were the safety of the vehicle, average cost to the tax industry, internal/environmental quality, noise or vibration level, ergonomics and vehicle durability among other things (Lombardi, 2011).

The Nissan NV200, which won the tender will be introduced to the city in late 2013 and will be in use for the next ten years. This model has several features that designers, Nissan North America Inc. promises will improve the quality and comfort of the riders and drivers. On safety features the model has sliding doors, exterior alert lights to warn other motorists of the doors being opened and passenger airbags. In terms of comfort, passengers will have their independent climate controls, filtered interior air, anti-bacterial nonstick seats, flat middles seat and no hump on the passenger floor (New York City Government, 2011).

In this vehicle, passengers will be able to charge their mobile phones and other devices, reading lights, more luggage room, interior floor lighting and exterior “horn light” that will reduce horn use. Other features will include built-in grab handles to ease entrance, easy to open sliding doors and spacious cabin. Drivers also will be more comfortable with more legroom, separate climate controls, GPS navigation and fuel efficiency which increase their earnings (Green Car Congress, 2011).

Data Collection Methods and instruments

Two self-administered questionnaires will be used to collect data that will combine structured questions and open-ended ones. One questionnaire will be administered to passenger respondents and another one will be administered to driver respondents. These will be sent through postal mail and emails to a large sample of respondents and will contain a few simple questions to encourage response. This tool provides greater anonymity, reduced bias and is also low cost though simplification of questions and lack of opportunity to probe is something that the researcher can not control (Meinzen-Dick & McCarthy, 2004).

Interview schedules are another tool that will be used to collect data on taxi owners where prepared questions will be used. This means the research assistant will ask the respondents questions and record the answers given. This is appropriate since the respondents are very busy people and will generate a higher response than self-administered questionnaires and will make the exercise more flexible since the time for interviews can be planned to suit the respondent and researchers’ schedule. The only setbacks are that it will more costly and may bring interviewer bias (Stopher, 2008).

A focus group discussion revolving the issues of quality service, passenger and driver safety, comfort and satisfaction will be conducted in a seminar organized by an NGO Design Trust for Public Space and TLC, and where the researcher has been invited, will be conducted.

In addition to this, documented literature will be reviewed. This will be gathered from books, newspaper reports, websites, reports, magazines, and journals and any other written materials (Stopher, 2008).

Definition of the Target Population and Sample Size

The target population of this study is the New York adult residents who use taxicabs on regular basis either going to work, to the airport, to school or on other errands but frequently in the Manhattan District. Also, the survey will target drivers of taxis around the city who serve this district frequently and several taxi owners.

Sample size and design

The sampling frame is a New York address book and a random sample of the passenger respondents will be taken and questionnaires sent to them using mail. A sampling frame of the taxi drivers will be obtained from the TLC from where another random sample will be drawn and questionnaires sent to them through the mail. Taxi owner respondents will be selected purposively at first from the list obtained from the seminar on those who attended and are willing to talk to us. In each case, we will ask whether they can refer us to a friend or an acquaintance whom we could interview thus applying the snowballing method (Stopher, 2008).

The survey will use a sample of 1000 respondents, 540 of whom will be passengers, 440 drivers and 20 taxi owners whose taxis will be either on long-term or short term lease.

Potential Managerial Benefits of the Proposed Study

The study is going to be useful in that the companies operating taxi fleets will be able to know what the passengers and drivers want to see changed or done to offer quality service. The companies will then focus on these things and since the Nissan North American Company has agreed to work with stakeholders in the development of the taxi of the future, they will be able to contribute to the success of the project. The companies will also be able to focus their managerial efforts towards ensuring the exert needs of the customers are met rather than guessing on what they need. This will ensure higher quality service and satisfaction not only to the passenger but also their drivers.

Taxicab drivers are portrayed sometimes as rude, arrogant and abusive towards their passengers. This is a chance for them to raise their concerns, expectations, and needs also since they an integral part of the service delivery. They will also be able to know what their passengers probably don’t tell them and what they expect from them too.

The passengers complain bitterly about the poor services they receive from New York taxicab services mostly through the media. Through this study, they have an avenue to communicate their needs and expectations to the faceless industry players who are very important yet unreachable. This will help the city authorities and industry regulators to act on these concerns.

Proposed Cost for the Total Report

Study Expense Cost in $US
Printing questionnaires 1,200
Research assistants (5) remuneration 7,500
Allowances 5,000
Cost of mailing questionnaires 1,200
Data analysis 9,500
Publishing report 2,000
Organizing Focus group expenses 1,000
Miscellaneous 2,500
Total Cost 29,900

Profile of the Research Company Capabilities

City Business Solutions is an information resource center where high-quality research is carried out in areas of marketing, business information technology, and business and economic policy research analysis. At City Business Solutions, research in industries such as public utilities, transportation, communication, real estate, pharmaceutical, and computer and software technology are covered by our cutting edge researcher and analysts. The findings, information, and analysis are disseminated through the use of reports, newsletters, conference papers, workshops and seminars and contributions to various journals.

We offer consulting services, research, customer insight, event, and peer-to-peer executive programs to businesses, government agencies and nongovernmental organizations. We focus on offering cutting edge research and analysis and also forward-thinking advice on global issues related to business and economy to global leaders and in business and technology.

Continued growth

City Business Solutions has consistently recorded growth since it was founded in May 1990. He has seen the company appearing to the Deloitte & Touche’s Fast 50 Award for several years over the years and the Economic Journal as the most sought after research center in America among other awards and recognitions. This fact is reinforced by the many projects we have carried out in different parts of the world with major organizations such as Wal-Mart and our association with Universities such as Harvard Business School and the University of Berkeley, California.

City Business Solutions research analysts:

  1. Are recognized experts and scholars in their fields of expertise (view their profiles in our website),
  2. They reside and work in the many countries of the world where many of them are actively involved in policy development issues and academics,
  3. Are holders of doctorate degrees and other advanced degrees from well-recognized universities in the world,
  4. Boast of many years of experience of working and teaching in their fields. The unique thing about City Business Solutions is that our analysts combine a mix of seasoned and fairly young analysts which combines experience with a fresh look at things,
  5. Able to apply time tested and proven methodologies in researching and analyzing issues in their fields while at the same time testing the new thinking in the market.

Tables of the Projected Results

Figure 1: Places of Origin of Taxi Riders in 2011

Place of residence Percentage
Manhattan 71
Outer boroughs 10
New York suburbs 5
Foreign 5
Other United States cities 9

Figure2: Customer satisfaction ratings on a scale of 1-10, 2011

Service element being rated Rating
Taxi service overall 6.2
Personal security during the day 7.5
Personal security after 8 o’clock 7.2
Overall comfort of the trip 6.9
Interior cleanliness of the vehicle 6.9
For fast mode of transport 6.8
For correct fare charging 6.8
Predictability of the ride time 6.6
Knowledge of destination by the drivers 6.3
Courtesy of the drivers 6.1
Understanding of direction by the driver 6.0
Safety from accidents 5.7
Got value for money paid 5.5
Availability of taxi when one needs it 5.3

NB: this is a rating by all respondents who had used cabs in the past three months from June-August 2011

Reference List

Greeen Car Congress. (2011). New York City Taxi and Limo Commissions Selects Nissan NV200 as “Taxi of Tomorrow”; Fully-electric Version Possible Starting in 2017. Web.

Grynbaum, M. (2011). With Taxis of Tomorrow, City Aims to Change Honk! Into Honk. The New York Times , p. A21.

Hodges, G. (2007). Taxi!: A Social History of the New York City Cabdriver. Baltimore :The John Hopkins University Press.

Lombardi, C. (2011). New York Hails Nissan for its New Cabs. Cnet News , p.12.

Mathew, B. (2008). Taxi!: Cabs and Capitalism in New York City. New York: The NewPress.

Meinzen-Dick, R., & McCarthy, N. (2004). Quantitive Methoids for Studying CollectiveAction and Property Rights. India: IFPRI.

New York City Government. (2011). Press Release: Mayor Bloomberg Announces Nissan NV200 As the Taxi of Tomorrow. Web.

Schaller, B., & Gilbert, G. (2005). Factors of production in a Regulated Industry: New York Taxi Drivers and the Price for Better Service. Transportation Quarterly , 82-98.

Shaller Consulting. (2006). The New York City Taxicab Fact Book. New York: Shaller Consulting.

Stopher, P. (2008). Household Travel Surveys: New Concepts and Research Needs. Conference on Household Travel Surveys: New Concepts and Research Needs (pp. 1-186). United States of America: National Research Council.

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