In May, New York Mayor Michael Bloomberg announced that all 13,000 of the city's yellow taxicabs must be replaced with hybrid vehicles by 2012. While some cities also are encouraging the use of taxis powered by alternative fuels, especially compressed natural gas, Boston, San Francisco and other cities are offering financial incentives to cab owners to help them overcome the high initial investment in hybrid technology.

Hybrid vehicle proponents say the vehicles, which run on electricity while idling or in slow-moving traffic and switch to a gasoline-powered engine at higher speeds, are an excellent way for the taxi industry to reduce pollution. But, because hybrids can cost an additional $20,000 compared to the used Ford Crown Victorias commonly used as taxis, which can be purchased for about $8,000, some taxi fleet owners need incentives beyond the potential savings in fuel costs to switch their vehicles to hybrids. Hybrids offer substantial fuel savings, says Bob Muldoon, spokesman for the New York chapter of the San Francisco-based Sierra Club. “We compared the Crown Victorias and found they were rated at 17 mpg, while the [Ford] Escape hybrid was rated at 36 mpg,” he says. “And, you get a roughly 40 percent reduction in greenhouse gases by using them.”

In New York, taxi owners who switch to hybrid vehicles earn a $2,000 income tax credit under federal and state law and a $3,000 sales tax rebate. Also, the city allows hybrid taxis to remain in service one to two years longer than regular taxis, Muldoon says.

Although New York taxis are privately owned and operated, the city's Taxi and Limousine Commission heavily regulates the industry. In May, Bloomberg announced that, beginning in October 2008, new taxis must achieve a minimum fuel efficiency of 25 mpg, and those added after October 2009 must achieve a minimum of 30 mpg. Because New York taxis must be replaced every three to five years, officials say a 100 percent hybrid fleet by 2012 will occur as a result.

In April, Boston launched its CleanAir CABS program to help cab company owners replace their taxis with cleaner vehicle technology, including hybrids, and is working with the Toronto-based International Council for Local Environmental Initiatives to award small grants for purchasing hybrid cabs. And, because many cab drivers rent their hybrids from fleet owners, the city now allows owners to charge drivers an additional $10 per shift for hybrid vehicles, and owners can share the savings the drivers see at the fuel pumps.

In June, the San Francisco Taxi Commission (SFTC) passed a resolution requiring a 50 percent reduction in greenhouse gas emissions from taxis by 2011. Hybrid technology would help meet that goal, says SFTC President Paul Gillespie, who also is a cab driver. “We've gotten some resistance from cab company owners,” he says. However, Gillespie is hopeful that the SFTC's recommendation to the city's board of supervisors to allow hybrid cab owners to charge drivers an additional $5.50 per rental shift so they can share gas savings will encourage more of them to cooperate.

San Francisco fleet owner Hal Mellegard says the benefits of hybrids may be negated by maintenance costs. “[Hybrids] are too new, so right now you can't buy used parts,” he says. “Our mechanics need more time to get familiar with them.”

Annie Gentile is a Vernon, Conn.-based freelance writer.