taxi of tomorrow
Post on 04-Apr-2018
218 Views
Preview:
TRANSCRIPT
-
7/29/2019 Taxi of Tomorrow
1/18
Ta x i o f To m o r ro w W h e r e a r e w e g o i n g ?
1
Green Accounting
Spring 2012
-
7/29/2019 Taxi of Tomorrow
2/18
2
Team Members:
Stefano Vrespa
Jessica EspositoScott Miller
Chuck Samul
Carlos Coella
-
7/29/2019 Taxi of Tomorrow
3/18
Background 5
A Cab history 5
PlaNYC and the Taxi of Tomorrow 6
Financial Analysis 8
Whats under the hood 8
e analysis 11
Our results 13
e Medallion lease model 14
A different proposal 14
Environmental Analysis 15
A non explosive phase out 15
Our results 16
Taxi of Yesterday? 17
e real deal 17
Food for ought 17
e Wild Car(d) 18
An electric future 18
3
-
7/29/2019 Taxi of Tomorrow
4/18
4
-
7/29/2019 Taxi of Tomorrow
5/18
Background
In May 2011, Mayor Bloomberg officially
announced the Taxi of Tomorrow nalist
vehicle model that will be replacing all of the
current eet of 13,237 NYC taxis. However the
Nissan NV200 hitting the streets in 2013 has
implications for the environment that make it
look more like the Taxi of Yesterday. In the
following report, we discuss a nancial and
environmental analysis of the current NYC taxi
eet and the future Nissan NV200 minivan.
e primary objectives of this analysis were to
understand if there are economic factors driving
the current vehicle-type mix, to identify the
economic advantages between hybrid, non-
hybrid and future eet vehicles, and to
determine environmental impacts over the ve-
year Nissan NV200 phase-in.
In l i gh t of ou r ec on om ic an d
environmental analysis we question some of the
decisions the current administration made in
regard to the Taxi of Tomorrow. We have
proposed and evaluated a new type of
ownership model that could foster the adoption
of hybrid vehicles, thus decreasing the taxi
eets green house gas (GHG) emissions.
Finally, we end our report by briey discussing
the challenges and the uncertainties of a
potential future electric taxi eet.
A Cab history
New York City has had motorized public
taxi service since 1897; ironically those original
taxis were the electric vehicles of the Electric
Carriage and Wagon Company. However when
the company went bankrupt in 1907, the citys
taxi eet was quickly converted to gasoline-
powered vehicles imported from France.
Within a decade, American companies like
General Motors, Ford Motor Company, and
the Checker Motors Corporation quickly began
5
-
7/29/2019 Taxi of Tomorrow
6/18
manufacturing and operatingeets1. New York
Citys iconic yellow taxis have been petroleum
fueled ever since.
By the 1930s, the number of cab drivers
soared over 30,000. During this time, the taxi
medallion system that is in place today was
introduced to mitigate concerns about the
proper maintenance and reliability of vehicles
and drivers, as well as the surplus of vehicles on
the citys increasingly congested streets. e
Haas Act signedby Mayor La Guardia in 1937
introduced a formal medallion system of taxi
licenses, limiting the number of licenses
available and thus restricting the number of
cabs on the road2. is quantity has uctuated
between roughly 11,000-17,000; today the Taxi
& Limousine Commission (TLC) has limited
the number of licenses to 13,237 medallions3 .
is mandated supply restriction has caused the
cost of a medallion to rise considerably over the
decades, with medallions that might have cost
$10 in 1930 now reportedly selling for as much
as $1,000,000 in 20114 .
PlaNYC and the Taxi of
Tomorrow
In 2007 Mayor Bloomberg introduced
PlaNYC, a long-term sustainability plan for
NYC which set the ambitious goal of reducing
green house gas (GHG) emissions by 30 % by
2030. With passenger vehicle emissions
making up approximately 18% of all GHG
emissions in New York City5, a key piece of this
plan was phasing in more energy efficient taxi
models than the highly inefficient Ford Crown
Victoria that dominates the taxi eet. To
encourage the adoption of hybrid vehicles, the
Mayors Office offered incentives in the form of
reduced prices on medallions for hybrid taxis,
and attempted to impose a 30-mpg fuel
6
1 http://en.wikipedia.org/wiki/New_York_taxi#Late_1890s_-_The_Electric_Era
2http://www.nytimes.com/1996/05/11/nyregion/medallion-limits-stem-from-the-30-s.html
3 http://www.nyc.gov/html/tlc/html/home/home.shtml
4http://cityroom.blogs.nytimes.com/2011/10/20/2-taxi-medallions-sell-for-1-million-each/
5 City of New York,Inventory of New YorkCity Greenhouse Gas Emissions, September 2011,by Jonathan Dicksonand Andrea Tenorio. Mayors Office of Long-Term Sustainability, New York 2011
http://cityroom.blogs.nytimes.com/2011/10/20/2-taxi-medallions-sell-for-1-million-each/http://cityroom.blogs.nytimes.com/2011/10/20/2-taxi-medallions-sell-for-1-million-each/http://cityroom.blogs.nytimes.com/2011/10/20/2-taxi-medallions-sell-for-1-million-each/http://cityroom.blogs.nytimes.com/2011/10/20/2-taxi-medallions-sell-for-1-million-each/ -
7/29/2019 Taxi of Tomorrow
7/18
economy requirement for new taxi vehicles
licensed in 2009. At the time, only hybrid
vehicles fullled this condition, which were
more expensive than conventional taxi models
and manyeet operators were skeptical of their
reliability and durability as a high mileage taxi
vehicle. As we will discuss in detail in our
nancial analysis, another key piece of this issue
is that while individual hybrid taxi owner-
operators realized cost savings immediately at
the pump, eet operators (whose contracted
drivers bear the cost of gas) do not. As a result,
eet operators led suit against the Mayors fuel
efficiency requirements and hybrid incentives,
which was eventually upheld in the US 2nd
Circuit Court of Appeals. at court ruled that
the citys attempts violated the pre-emption
clauses of the Energy Policy Conservation Act
(EPRC) and the Clean Air Act (CAA), and
blocked the City from enacting these initiatives.
As a result, the Mayors Office and TLC
considered another way to increase the
efficiency of their taxi eet that focused on
phasing out the gas-guzzling Crown Victoria:
the Taxi of Tomorrow project. Introduced in
2009, the project was aimed at developing a
new, uniform blueprint for NYCs iconic yellow
taxi eet that incorporated the priorities of key
city stakeholders including taxi drivers, owners,
passengers and city residents. e TLC
surveyed taxi passengers and solicited design
proposals from vehicle manufacturers, which
resulted in three nalists. In May 2011, the
Mayors Office and TLC announced that the
Nissan NV 200 was officially selected as the
Taxi of Tomorrow. Our analysis compares the
nancial and environmental implications of the
current taxi eet and the Nissan NV200.
We have cons ide red seve ra l key
stakeholders impacted by this initiative. TLC is
interested in administrative ease and a stylish
7
-
7/29/2019 Taxi of Tomorrow
8/18
replacement to the iconic Crown Victoria. e
Mayors Office has aggressive GHG reduction
goals and is eager to replace the inefficient
Crown Victoriaeet.
Su rvey ed t a x i r i d e r s p r i o r i t i z e
sustainability, passenger comfort and safety.
And perhaps the most notable of these
stakeholders, particularly in our nancial
analysis, are the taxi owners and drivers
themselves. Owner-operators are especially
interested in operating costs, while eet owners
are most concerned with acquisition and
maintenance costs.
Financial
Analys is
Whats under the hood
In following section we discuss and
evaluate the results of a Net Present Value
(NPV) analysis performed for the varying
models of the current eet, and future Nissan
NV200 eet. e analysis highlights some of
the potential factors that drive the vehicle
choice in terms of fuel efficiency across four
medallion ownership types, and the
environmental implications in terms of GHG
emissions, particularly in light of PlaNYC
2030s GHG emissions reductions goals.
8
-
7/29/2019 Taxi of Tomorrow
9/18
For our analysis, we evaluated ve
different vehicle models from the current eet.
ese ve models, which include three
gasoline-powered and two hybrid-electric
models, were selected for the analysis because
they represent a high percentage of the current
taxi eet, their variations in fuel efficiency, and
other factors such as ADA requirements. e
eet sample considered in our model includes
the following vehicles:
Ford Crown Victoria, 58% of the total
current eet (16 mpg city);
Ford Escape Hybrid, 26% (33 mpg);
Toyota Sienna, 9% (17 mpg);
Toyota Camry, 4% (22 mpg);
Toyota Prius Hybrid, 2% (51 mpg).
e future Nissan NV200 eet will
consist of a single, non-hybrid model, rated at
25 mpg city, which will replace the current eet
over a 5-year phase-in period starting in 2013.
Be fore d i s cus s ing the p r imary
assumptions and hypothesis that will drive our
nancial and environmental conclusions, it is
important to emphasize that our nancial
model doesnt take into account any initial
medallion investment. is simplication is
mainly due to the medallions price volatility
over the past 20 years most recently
skyrocketing to $1,000,000 as well as the
medallions ownership timeframe that varies
greatly among owners.
Moreover, this cost would not affect either
the results or the decision among different
vehicles if we evaluate the cost of the medallion
as an occurred expense equal throughout each
type of ownership model.
ere are currently four types of
ownership models that potentially affect the
medallion owners vehicle choice, and thus the
fuel efficiency of the vehicle. e four types of
medallion ownership include the following6:
Owner operated only: the medallion
owner drives his own vehicle and pays for gas;
Owner operated and leased: the
medallion owner drives his own vehicle and
pays for gas, and leases it to a second driver
for an extra shift (who pays for their own
gas);
9
6http://www.schallerconsult.com/taxi/taxifb.pdf
http://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdf -
7/29/2019 Taxi of Tomorrow
10/18
Fleet-type: the corporate medallion
owner pays the drivers (average 3 per car)
based on the shift length usually 2080
hours per year, drivers pay for gas;
Long-term lease: the medallion owner
leases the car (2 drivers per car on average),
drivers pay for gas.
Because we performed an NPV analysis
from a vehicle-owner point of view, these
differences among ownership models are critical
to our assessment. We have assumed annual
gross revenue per vehicle to be $145,200 and
an average of 64,600 miles driven per vehicle
each year.
Under this assumption, the contractual
differences among models have a signicant
impact on the owners gross revenue
independently from the vehicle choice. us, to
perform an NPV comparison among vehicles
and ownership models we considered the
following parameters:
a medallion loan of $1,500 total per
month, split among the drivers;
tips, 15% of the total gross revenue;
number and duration of shifts, in
proportion to a hypothetical 24-hour shift;
salary, for the eet-type and the owner
operated and leased model;
cab lifespan: 5 years for owner-operators
and long-term leases, 3 years for eet-type
ownership7;
gross revenue divided between driver
and owner for the long-term leasing model8 .
ese differences will impact the cash-ow
analysis per ownership model and type of car
and they could potentially affect the vehicle
choice.
Across the four ownership models, gas
costs always fall on the driver, whether the
driver is the owner-operator, paid by a company
(eet-type), or if he leases medallion and
vehicle (long-term lease). While the medallion
owner always pays the vehicle expenses, the cost
of gas will affect only the drivers income. is
10
7 Per TLC requirements, cars brought into service as cabs must be new models and must be replaced every 3-5years. Fleet-type cabs are usually driven by unspecified drivers and must be replaced every 3 years. (http://www.schallerconsult.com/taxi/taxifb.pdf)
8http://www.schallerconsult.com/taxi/taxifb.pdf
http://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdf -
7/29/2019 Taxi of Tomorrow
11/18
particular variation across ownership models
appeared to be the major factor driving our
results, and potentially the economic driver
behind the owners choice in vehicle.
Other minor factors that we considered
in our models were:
straight line depreciation;
zero salvage value after 3 or 5 years,
depending upon the conditions previously
cited;
ma in tenance and repa i r co s t s
proportional to the average miles per year9 ;
drivers license, vehicle taxi conversion,
insurance costs.
The analys is
e tables following include taxi data,
ownership data and assumptions. e complete
analysis is an Excel matrix calculating the NPV
for each of the 6 vehicle types and for each of
the 4 ownership models, which is attached to
this document.
As displayed in Figure 1 there is a clear
economic incentive for the owner-operator to
chose a hybrid vehicle instead of a non-hybrid
model even under the current gas price. e
economic incentive is directly proportional to
the average miles driven per year and to the cost
of gas, and is particularly evident for the rst
parameter due to the high number of miles
driven each year. On the other hand, for the
other two types of medallion ownership (eet-
type and long term lease), there is no clear
economic incentive that drives the choice
between vehicles and therefore there must be
other contributing factors, such as maintenance
costs or reliability, which inuence the vehicle
choice.
e cost of gas, which is covered by the
driver, then becomes the primary incentive just
for one type of owners category owner-
operated cabsresponsible for roughly one
11
9http://www.edmunds.com, http://www.autotrader.com, http://autos.aol.com/, http://www.motortrend.com
http://www.motortrend.com/new_cars/04/toyota/sienna/http://www.motortrend.com/new_cars/04/toyota/sienna/http://autos.aol.com/cars-Toyota-Prius-2011/cost-to-own/mileage-20000/state-US/http://autos.aol.com/cars-Toyota-Prius-2011/cost-to-own/mileage-20000/state-US/http://www.autotrader.com/research/modelinfo/overview.xhtml?styleid=326217http://www.autotrader.com/research/modelinfo/overview.xhtml?styleid=326217http://www.edmunds.com/ford/crown-victoria/2007/tco.htmlhttp://www.edmunds.com/ford/crown-victoria/2007/tco.html -
7/29/2019 Taxi of Tomorrow
12/18
third of the total taxi eet.
Two additional results driven by
economic incentive can easily be seen, First of
all, there is an economic incentive for the
medallion owner to switch from the eet-type
to the long-term lease, a trend that is already
occurring according to the 2006 Taxi
Factbook10. Secondly, there is a clear economic
incentive for an owner-operator to lease their
cab for a second shift and retain part of the
earnings. In light of these conclusions, we
propose a potential solution to incentivize the
adoption of hybrid vehicles by intervening
on the dichotomy between who buys the car
and who pays for the gas.
12
10http://www.schallerconsult.com/taxi/taxifb.pdf
Additional assum tion for ownershi t es
Financial data by ownership type
Vehicle data
http://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdfhttp://www.schallerconsult.com/taxi/taxifb.pdf -
7/29/2019 Taxi of Tomorrow
13/18
Our resul ts
13
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
$280,000
FORD "CrownVictoria"
FORD "Escape" TOYOTA "Prius" TOYOTA "Sienna" TOYOTA "Camry" NISSAN NV200
NPV5y
1c
NPV - Owner Operated
NPV - Fleet Type
NPV - Long term leasing
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
$220,000
$240,000
$260,000
$280,000
FORD "CrownVictoria"
FORD "Escape" TOYOTA "Prius" TOYOTA "Sienna" TOYOTA "Camry" NISSAN NV200
NPV5y
1c
NPV - Owner Operated
NPV - Fleet Type
NPV - Long term leasing
owner operated with extra shift
owner operated without extra shift
Figure 1 NPV analysis per type of vehicle and
ownership model
-
7/29/2019 Taxi of Tomorrow
14/18
The Medal l ion
lease model
A different proposal
e idea behind this proposed model is to
merge the responsibilities of car buyer and gas
payer (the driver) in order to incentivize the
introduction of hybrid cabs (Prius in primis).
is choice would be driven by the notable
NPV (or EBIT) difference among the hybrid
and non-hybrid vehicle types, even with the
current gas price. We expect the primary effect
of this proposal to be the increased adoption of
hybrid models within the current eet and thus
the overall reduction of GHG emissions, in line
with PlaNYC 2030 emission reduction targets.
To effectively pursue this model the
medallion owner needs to be incentivized by a
revenue certainty that will yield a net income
equal to or almost equal to (due to a lower
business risk) their current one. e driver will
only be incentivized to pursue this model by a
vehicle-based EBIT at least similar to his actual
gross revenue.
Even by running our analysis under the
most favorable conditions using the lowest
NPV for the medallion owner, using the vehicle
that would grant the highest EBIT (Prius), and
using the lowest driver gross revenue (eet-type
model) there is a lack of nancial incentive
for the driver to pursue this model.
Incentives such as a lower tax rate, gas
discount, or other fuel efficiency-based
incentives are needed to support the driver and
inuence the adoption of vehicles with higher
fuel efficiency. A potential next step for this
proposed model could be the analysis of
different incentive options and their impacts on
the hybrid adoption rate and overall GHG
emissions.
14
-
7/29/2019 Taxi of Tomorrow
15/18
Environmental
Analys is
A non explos ive phase
out
In light of PlaNYC 2030s GHG emission
reduction targets, we have analyzed the
emission levels of the current eet and the effect
of the NissanNV200s ve-year phase-in period
beginning in 2013.
O v e r a l l , t h e
Nissan NV200
ph a s e - i n w i l l
result in slightly
higher emission
levels; the current
average emission
(weighted by the
actual vehicle adoption rate) is 425 grams of
CO2e per mile, and the future average emission
rate will be 431 grams of CO2e per mile.
While this will not result in a signicant change
in emissions levels, it is interesting to see how
the Nissan NV200 phase-in is likely to be over
the next ve years and the impact of the current
eets phase-out. Despite the high proportion of
high-emitting Crown Victoria models that
dominate the current eet,
Upon the assumption that every owner is
willing to maximize their revenue, or that they
are pursuing the highest NPV value meaning
that the owner-driver model absorbs entirely
the hybrid vehicle percentage (roughly 28%)
the main assumption is a linear phase-out
starting in 2013. It is important to underline
the different lifespan between the eet-type
model (3 years) and the long-term lease model
(5 years), both based on non-hybrid models.
15
-
7/29/2019 Taxi of Tomorrow
16/18
Our resul ts
As shown in Figure 2, the phase-out rate
for the non-hybrid eet is accelerated because
eet-type vehicles, which are assumed to be
non-hybrids, are replaced more frequently. us
overall GHG emission levels are initially
lowered between 2014-2015 as gas guzzling
Ford Crown Victorias (16 mpg) are replaced
with the more efficient Nissan NV200 (25
mpg). However in 2017 when the phase-in is
complete, overall GHG emissions will rise
above current levels as hybrid models (33-51
mpg) are replaced by the lower performance
Nissan.
16
!342,000!'
!344,000!'
!346,000!'
!348,000!'
!350,000!'
!352,000!'
!354,000!'
!356,000!'
!+!!!'
!50,000!'
!100,000!'
!150,000!'
!200,000!'
!250,000!'
!300,000!'
!350,000!'
!400,000!'
2012' 2013' 2014' 2015' 2016'
To
talTonsCO2equiv.
TonsCO2equiv.
/Taximodel
FORD!Crown!Victoria'
FORD!Escape'
TOYOTA!Prius'
TOYOTA!Sienna'
TOYOTA!Camry'
NISSAN!NV200'
total!CO2!eq.!emission'
Figure 2 Emissions levels during 5-year Phase-in Period
-
7/29/2019 Taxi of Tomorrow
17/18
Taxi of
Yesterday?
The real deal
Based on the nancial and environmental
results of our analysis, it is difficult to
understand what factors drove New York Citys
choice for the future taxi.A public survey of 23,000 NYC taxi riders
found that the top three priorities were:
1. environmental sustainability;
2. passenger comfort;
3. safety 11.
e Nissan NV200 is a considerable
improvement over the gas-guzzling Crown
Victoria, and did boast the highest fuel
efficiency of the three nalists. However this
model is clearly a step backwards from the high
efficiency hybrid eet that has been gaining
traction in the NYC taxi eet in recent years.
Regrettably, the current Nissan NV200 falls
short of taxi riders top priority.
Food forThought
Interestingly, the Nissan NV200 is
currently sold in Europe with a diesel engine
rated at 54 mpg, in compliance with the
current European fuel efficiency requirements.
Despite the difference in engine (gasoline vs.
diesel), it is difficult to understand why NYC
would not pursue this model, with nearly
double the fuel efficiency.
17
11http://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxi
http://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxihttp://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxi -
7/29/2019 Taxi of Tomorrow
18/18
The Wi ld
Car(d)
An electr ic future
While the Taxi of Tomorrownalists were
not explicitly judged on environmental
attributes, one factor noted in choosing the
Nissan NV 200 was the anticipated availabilityof an all-electric NV200 model by 2017.
Nissan has also stated that the NV200 gas
model can be easily retrotted to an electric
engine, once the technology becomes available.
Nissan, who already manufactures the all-
electric Leaf, is eager to establish itself as a
leading electric car manufacturer.
In anticipation of a potential electric eet,
TLC, city officials and Nissan are piloting six
all-electric Nissan Leaf taxis beginning in 2012.
is pilot program is intended to test the
performance of EVs under typical high mileage
conditions. e Nissan e-NV200 will have the
same 24-kWh lithium ion battery and 80-kW
electric motor as the 2012 Nissan Leaf12.
e e-NV200 Concept model is slated to
have a similar range to the Leaf (70-100 miles).
Using a Level 2 charging station, this would
require 7 hours of charging time. is is a
considerably lengthy time requirement for a
cab, and would severely limit driver shift times.
To mitigate this potential concern, Nissan is
currently working on the development of
quick-charging ports that can charge to 80%
capacity in 30 minutes.
e nancial and environmental
implications of the transition from gas-powered
to electric-powered vehicles are difficult to
determine without knowing the future energy
prole or rates of the electric grid. According
to the most recent EPA eGRID data, NYCs
electricity grid mix is primarily nuclear (43%),
gas (34%), and oil (20%)13. Further analysis of
the emissions outputs from the grid would be
necessary to determine whether electric vehicles
are the right choice for NYC.
18
12http://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxi
13 http://cfpub.epa.gov/egridweb/view_srl.cfm
http://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxihttp://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxihttp://www.greencarreports.com/news/1071606_nissan-e-nv-200-concept-electric-minivan-nycs-electric-taxi
top related