Monday, October 13, 2008

Public policy and technological innovation: the case of taxis

New York City requires that all taxis will be hybrid (or better) by 2012. The taxi lobby is fighting this, but one of the problems at hand is that there simply aren't enough hybrid vehicles available to meet the demand of the city ordinance.

Since taxis drive around all the time, they should be given priority for purchasing hybrids over regular personal users because greater reductions in fuel consumption and emissions will be realized. However, it is not clear if the city policy is flexible enough to meet the challenges out of the city's control, such as automobile production. And does the city's policy of going all in on hybrids create incentives to lock into that technology at the (potential) expense of alternatives such as electric cars, hydrogen fuel cells or new fuels? Maybe the city should commission Chevy to build enough Volts to replace the entire taxi fleet. That would accomplish the city's goals and perhaps help the Volt become a viable vehicle in the marketplace.
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