Electrify Taxis in New York City - Columbia SIPA
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Electrify Taxis in New York City
Zehua Guan, Zora Xiang, Beiwen Shen, Xuechun Bao, Bojun Chen
ETaxi NYC
May, 2020
Table of Contents
I. Status quo in New York City ........................................................................................... 2
1. NYC taxi industry ....................................................................................................................2
2. Electrification progress............................................................................................................4
3. Policy timeline ........................................................................................................................6
II. Stakeholders Analysis ................................................................................................. 7
III. Case Studies .............................................................................................................. 10
1. Shenzhen Case ...................................................................................................................... 10
2. Taiyuan Case......................................................................................................................... 18
3. London Case ......................................................................................................................... 19
IV. Identified Problems ................................................................................................... 23
1. Charging Infrastructure ......................................................................................................... 23
2. Drivers' Willingness............................................................................................................... 25
3. Profit Analysis ....................................................................................................................... 27
V. Recommended Solution ................................................................................................... 33
1. The pilot program ................................................................................................................. 33
2. Ancillary policies ................................................................................................................... 33
3. Infrastructure ....................................................................................................................... 34
4. Financial Support .................................................................................................................. 35
VII. Limitations and Further Research ................................................................................ 38
VI. Acknowledgement.......................................................................................................... 38
1
I. Status quo in New York City
1. NYC taxi industry
1.1 Scale of fleet
By the end of 2019, New York city has a total number of 133,532 Vehicle Licenses and 197,998 Driver
Licenses. There are 130 total business Licenses in the city, including 20 taxicab brokers, 71 Medallion
Agents, 3 technology service providers and 6 E-hail providers.
The fleet is composed of mainly three types of taxis, Medallion taxis (yellow taxis), Street Hail Liveries
(green taxis) and For-Hire Vehicles. Medallion taxis and SHLs can both be hailed in streets, while SHLs
cannot pick up customers in Manhattan below E.96th St. and W.110th St. FHVs can only provide pre-
arranged services. FHVs entered the market in 2015, and has experienced an explosively increasing
number of active drivers. By 2019, more than 83,000 drivers now drive for the three largest For-Hire
Vehicle companies in New York City, which operate through the apps Uber, Lyft, and Via, these three
companies account for over 91% of For-Hire Vehicle trips.
Table 1 NYC Vehicle & Driver basic information1
Vehicle Daily average
Active Drivers by
Term Explanation Licenses by number of
June 1st, 2018
20192 trips 2018
Medallion
Yellow Cabs 13,587 29,362 296,295
Taxicabs
Street Hail Liveries, aka Green
SHL 3,004 3,979 26,029
Taxi (Boro Taxi)
For-Hire Vehicles, including Black
FHV 116,449 91,918 80,259
car, Livery and Luxury Limousine
For vehicle type also includes
Standby Vehicles in street hail
Total service, Paratransit Vehicles & 133,532 125,259 402,583
Commuter Vans in Prearranged
Services
1.2 Taxi fare mechanism
1New York City Taxi & Limousine Commission, “2018 Fact Book,” February 14, 2019,
https://www1.nyc.gov/assets/tlc/downloads/pdf/2018_tlc_factbook.pdf.
2New York City Taxi and Limousine Commission, “2019 Annual Report,”
https://www1.nyc.gov/assets/tlc/downloads/pdf/annual_report_2019.pdf.
2
NYC’s yellow and green taxis are currently using the Standard Metered Fare Mechanism for fare charges.
The calculation starts with a $2.50 initial charge plus $1.00 per mile or per minute in slow traffic, added
by $0.50 MTA surcharge, $0.30 improvement surcharge, $0.50 overnight surcharge during 8pm to 6am.
Customers will also be charged an additional $1.00 for riding in rush hours on weekdays (4pm to 8pm),
and a New York State Congestion Surcharge differentiated by taxi types if the trip starts or passes
Manhattan south of 96th Street.3 Taxi trips between Manhattan and John F. Kennedy Airport are charged
a fare of $52 regardless of total distance or time, plus the same MTA and improvement surcharge, while
charged $4.50 for rush hour operation instead.
Majority of taxi trips in NYC are within short distances. In 2018, 73.9% of yellow taxi trips were within 3
miles, and the number for SHLs was 70.0%. Few rides reach more than 10 miles, 5.9% for yellow taxis and
3.1% for SHLs. According to figure 1, we can see that the average taxi fare per trip reaches its highest in
the latter half of the night and during rush hours in the afternoon. Yellow taxis charge higher during the
night. And as FHVs are majorly operated by large app-based companies, data on their average fares
remain hard to obtain.
Starting in March 2018, TLC has been encouraging yellow and green taxis to explore new business models
by setting the upfront fare pilot, like app-based taxis, with the participation of TLC-licensed E-Hail app
companies. The pilot officially began on June 27, 2018, but adoption of the pilot seemed slow.
Figure 1 NYC 24-hour average per-trip taxi fare fluctuation on Mondays in 2018 4
$19.00
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Medallion SHL
1.3 NYC Taxi drivers
NYC has a diversified group of taxi drivers. Over 50% of the drivers are from Bangladesh, the Dominican
Republic, Pakistan, the US and India, while six languages are majorly spoken: English, Spanish, Bengali,
3 Congestion Surcharge: $2.50 for Yellow Taxi, $2.75 for Green Taxi and FHV, $0.75 for any shared ride.
4New York City Taxi & Limousine Commission, “2018 Fact Book,” February 14, 2019,
https://www1.nyc.gov/assets/tlc/downloads/pdf/2018_tlc_factbook.pdf.
3
Urdu, Russian and Simplified Chinese. Over 95% of them are male under the age of 50, and there has been
a decreasing trend of average age. Among different types of taxis, 58.3%-63.8% of drivers live in Queens
and Brooklyn, and in total over 85% drivers live in NYC.
2. Electrification progress
2.1 EV market Penetration
NYC has a growing number of Electric Vehicles, dominantly private-owned. The number of electric vehicles
on the road reached 9,172 in 2018. The number of Battery Electric Vehicles (BEVs) and Hybrid Plug-In
Vehicles (PHEVs) are similar, majorly located in Manhattan and Queens. The most popular BEV models
are Tesla Model S 705, Tesla Model X 619, Tesla Model 3 375, Chevrolet Bolt EV 195 and Nissan Leaf 152.
Several State and City policies have worked in favor of this development, such as the Drive Clean Rebate
providing NYC residents more than 14,000 rebates up to $2,000 for purchasing a new EV. Con Edison and
National Grid, the two utilities operating in NYC, also provide Time-of-use (TOU) rates allowing residents
to save money on electricity bills when they charge their EVs during off-peak hours (12 am to 8 am all year
round), during which electricity is cheaper.
Table 2 Number of Electric Vehicles in NYC 5
Brooklyn Queens Manhattan State Island Bronx Total
BEVs 992 1362 1739 323 272 4688
PHEVs 827 1824 1077 548 208 4484
Total 1819 3186 2816 871 480 9172
2.2 Taxi-related regulations
While there’s no certain restriction on SHL vehicles at present, all yellow taxis in NYC must use a vehicle
choosing from the TLC-approved list of car models. Until the time this report is written, TLC has approved
10 hybrid vehicle models and only 1 EV model (Tesla Model 3) for yellow taxis. All yellow and green taxis
are printed and marked by the only one authorized organization Memorandum of Understanding (MOU).
5Atlas Public Policy, EValuateNY, May 3rd, 2020,
https://app.powerbi.com/view?r=eyJrIjoiMjQwYTdhNTAtMmI5OC00ZmZkLWJiMDQtNjI0NDM0Y2E4N2QyIiwidCI6IjFiYjQ4ZGE0L
TMxNDMtNDAzMS1iZGFlLWNjYzA0MDc1MDhmZSIsImMiOjF9.
4
Figure 2 Approved car model for NYC Medallion taxicabs 6
2.3 Charging infrastructure
NYC is under the process of building charging infrastructure to serve the needs of its enlarging EV fleet.
On the state level, the New York Public Service Commission has also initiated a Make-Ready Program
providing incentives to light duty electric supply equipment and infrastructure (EVSE&I) for Level 2 and
DCFC stations. This program would cover 90% of the costs of charging station construction if all eligibility
criteria are met, eliminating major economic barriers for developers. With the help of the make-ready
program, most DCFC stations would have a positive 10-year Net Present Value in the first year developed.
New York State also supports investments in charging station installations through the Charge Ready NY
Program, calling for at least 10,000 public and workplace charging stations to be available by 2021, with
6New York City Taxi & Limousine Commission, Yellow Cab Hack-Up: Approved Vehicle List,
https://www1.nyc.gov/site/tlc/businesses/yellow_cab_hackup.page.
5
priorities to build stations along the State’s highways. In addition, a tax credit of 50% cost (up to $5,000
per station) is offered to public and workplace charging stations.7
On the city level, the Department of Transportation (DOT) has planned for 7 Direct DCFC fast charging
pilots throughout the city using the $10 million fund from the city government, building mainly on DOT
owned properties. DOT is also working with Con Edison planning to build 100 Level2 curbside charging
ports over four years of demonstration, converting regular parking spaces to EV parking. Early results of
this initiative are expected to be seen in 2020.
Table 3 NYC Charging Infrastructure by October 2019 8
Time to Fully
Number of Number of
Charge a 200- Connector Type
charging stations charging outlets
mile battery
Level 1 (120 V AC) 40 hours - 3 3
Level 2 AC (240 V AC) 8 hours J1772 Connector 325 868
40-50 minutes
DC Fast Charging CCS, CHAdeMO,
with 50 kW 8 21
(480 V DC) Tesla
power
3. Policy timeline
New York State has ambitious climate change policies, including commitment aiming at a green and
sustainable transportation sector. In the long term, transportation electrification has been identified as
one necessary path to help meet the 40% GHG emission reduction goals by 2030.9 As an important part
of the transportation system, the taxi industry has also undergone a series of regulation changes. With
the current supportive policy environment, electrifying the taxi fleet would serve as an important effort
of New York City transforming to a low carbon transportation sector in the future.
7New York State Department of Public Service, “Electric Vehicle Supply Equipment and Infrastructure Deployment,” January 13,
2020, https://www.coned.com/-/media/files/coned/documents/business-partners/business-opportunities/energy-storage-
request-for-proposals/make-ready-report.pdf.
8New York State Official Website, Electric Vehicle Station Locator, https://www.nyserda.ny.gov/All-Programs/Programs/Drive-
Clean-Rebate/Charging-Options/Electric-Vehicle-Station-Locator#/find/nearest.
9 New York State Government, “2015 New York State Energy Plan,”, https://energyplan.ny.gov/Plans/2015.
6
Figure 3 Policy Timeline of New York State
II. Stakeholders Analysis
1. State Government
The state government advocates for building a statewide electrifying transportation system. On January
17th 2020, Governor Andrew Cuomo announced that New York residents can buy electric vehicles with
a rebate of up to $2,000. Specifically, the Governor directed the Department of Public Services to
consult with stakeholders and propose a ready plan that will provide utility support to accelerate the
development of electric vehicle charging infrastructure to meet expectations for electric vehicles in the
7
next five years increase.10 It is emphasized that New York State’s commitment to further encourage
electric cars, along with their supporting facilities such as charging stations.
2. City Government
The New York City Government is dedicated to electrifying the NYC taxicabs; however, the
implementation plan is not processing. Mayor Bloomberg from the last Municipal Government has once
set a goal to make one third of New York taxicabs electric by 2020. However, until Mayor Bloomberg
retired, this implementation plan stagnated without any improving results in electrifying taxis in the
city.11 The city government is the direct policy maker of the plan of electrifying the NYC taxicabs, and
also serves as the role of the regulator of different stakeholders. The city government also has a
commitment in electrifying the taxicabs in the city. The uncertainty lies in the inefficient executive
mechanism and the insufficient budget of the city government.
3. TLC
The New York City's Taxi and Limousine Commission is doing a lot of preliminary work in field research,
but a lot less in field work. The New York City's Taxi and Limousine Commission serves as the leading
governmental agency which was going to conduct Mayor Bloomberg’s implementation plan of making
one third of New York taxicabs electric by 2020. TAKE CHARGE A Roadmap to Electric New York City,
which analyzed the feasibility of the electric-taxi initiative the day before Bloomberg left office.12 While
in this report, TLC collected a load of information and made several suggestions to the city government,
such as issuing electric vehicle market assessment for EV manufacturers, testing EV chargers, harnessing
relationships with potential fund providers, and making some legal and regulatory changes. However,
until today, few recommendations have been really adopted in the practical implementation plan. In our
interview with TLC, it is suggested that there exist several problems for processing an electric taxi pilot
program such as the range anxiety of EV taxis, the challenge of the driver’s willingness for EV taxis, and
the low capacity of public charging infrastructure.
4. MOS
The New York City Mayor’s Office of Sustainability (MOS) consists of a group of government consultants
that are dedicated to make NYC a place where the air is clean, the streets are green and where the
residents produce zero waste and zero carbon. Electrifying NYC’s taxicabs is one of their crucial research
projects. In 2017, Mayor de Blasio had instructed the Mayor’s Office of Sustainability to direct a City
Electric Vehicle Fleet initiative. To prepare for this initiative, MOS has developed some strategies on
complementary partnerships and policies to meet this EV penetration target.
5. EV Manufacturers
10New York State Government,“Governor Cuomo Announces Make-Ready Program for Electric Vehicles”,
https://www.governor.ny.gov/news/governor-cuomo-announces-make-ready-program-electric-vehicles.
11New York City Government, “Take Charge A Roadmap to Electric New York City”,
https://www1.nyc.gov/assets/tlc/downloads/pdf/electric_taxi_task_force_report_20131231.pdf.
12New York City Government, “Take Charge A Roadmap to Electric New York City”,
https://www1.nyc.gov/assets/tlc/downloads/pdf/electric_taxi_task_force_report_20131231.pdf.
8
According to the experiences of Shenzhen, EV manufactures will benefit from this transformation for:
the increasing sales, building up charging systems and related services such as maintenance. However,
there are no manufacturers showing significant manufactures trying to enter this market yet. We
consider the potential EV manufacturers to be interested in Tesla and Chevrolet. Their influence on this
project is limited. It would be great if they want to use this chance to expand their market and invest in
it. But if they simply want to sell vehicles, it's no harm for the transformation.
6. Taxi Companies
Their jobs include purchasing vehicles, holding medallions and finding drivers. Their business model can
be described as renting medallions or vehicles to drivers and earn a fixed rent. However, the price of
medallion is going constantly down and the companies which bought them are carrying a burden of
failing to fulfill their anticipation of profitability. If they find the transformation adds to their difficulty,
they will definitely be against it. Their concerns include profitability, difficulties of changing
management, financing of purchasing. They are of crucial importance to the success of this
transformation.13
7. New York Taxi Workers Alliance (NYTWA):
They are the alliance of taxi drivers and their core position is to ensure a reasonable cap for For-Hire-
Vehicles to protect the income of their members. They represent the interest of their members and
have influence on the policy. They are of importance to this project.
8. Investors
We need to change the flow of investment to change a system. Thus, investors are crucial in providing
funding. We know there are some investors who are interested in funding sustainable and low carbon
transportation. Considering the feature of EVs and the ambiguous future of taxis, finding appropriate
investors can be hard unless the investors are confident about the future. The key points to convince the
investors are to provide evidence that the investment is profitable and resistant to risks. They are willing
to know the collateral, source of earnings and the risk. They are also of crucial importance.
9. ConEdison
ConEdison is the infrastructure provider in NY. The increased demand of capacity brought about by
electrification calls for their upgrading of built wire systems, which means a huge amount of investment.
However, good news is that the State government has initiated a "make-ready program" which calls the
infrastructures companies to make-ready for the installment of charging poles and stations. They are of
crucial importance to this transformation.
10. Uber and Lyft
They have a similar foundation as traditional taxis but they don't have to pay for the medallion. They are
disruptive challengers of the taxi market. For taxi drivers, it is only fair when Uber and Lyft are regulated
13Sean Bryant, "How NYC's Yellow Cab Works and Makes Money",
https://www.investopedia.com/articles/professionals/092515/how-nycs-yellow-cab-works-and-makes-money.asp
9under same policy. If they change into EVs, it is a large amount of transformation and it can also help to
push the traditional taxis to change.
Figure 4 Stakeholder Structure of NYC
III. Case Studies
1. Shenzhen Case
Shenzhen is one of the first megacities in the world to electrify all of its taxi fleet. In Shenzhen, there are
64 taxi companies and about 21,700 taxis. Nearly all of them, 99.06% or 21,485 to be precise, have been
electrified14. This makes Shenzhen a very important case to the world and especially to our practicum
project. Therefore, during the winter holiday from January 9th to January 15th, our team visited Shenzhen
and had interviews with government officials, public and private taxi companies, a research institute, and
taxi drivers. We also conducted field research in charging stations and driver resting zones.
In this part, we will try to figure out the following questions: (1) How did Shenzhen achieve taxi
electrification? (2) What are the effects it brings to different stakeholders in Shenzhen? (3) Is there any
experience that New York City could learn from Shenzhen?
1.1 How the project is implemented
14 Shenzhen Transportation Committee of Shenzhen Municipality, "Taxis in Shenzhen have been basically electrified",
http://jtys.sz.gov.cn/hdjl/zxft/fthg/201903/t20190301_16661370.htm
10There are mainly three stages for the Shenzhen Government to promote taxi electrification. Year 2010 to
2014 is called “pilot period”, during which Shenzhen government led BYD Auto and Shenzhen Bus Group
to establish the first electric taxi company - Shenzhen Pengcheng Electric Taxi Company, and issued about
800 free licenses for them to operate as a pilot company. The “promotion period” was from 2015 to 2016.
During this period of time, state-owned taxi companies are encouraged to utilize the appointed electric
taxi indexes and set an example for the whole taxi industry. Year 2017 to 2018 is the “fully electrification
period”, Shenzhen government required most taxi companies to adopt electric taxis and about 70% of all
city taxis were changed into electric ones in these two years. In the future, Shenzhen may put more
emphasis on promoting the intelligent operation in the taxi industry.
To achieve the 100% electrification goal, the Shenzhen government issued a series of incentive policies
and try to benefit all the stakeholders during this transition. The specific measures are stated as the
following.
1.1.1 Subsidies to taxi companies (2017-2018)
During 2017 to 2018, for a single electric taxi adopted, the taxi company can not only get 44,000 yuan
national subsidy and 22,000 yuan local subsidy, but also 164,800 yuan “one-time extra emission reduction
reward” which is unique in Shenzhen, according to our interview with Xihu, the largest private company
in Shenzhen. Take BYD e6, the electric taxi car model in Shenzhen, as an example, its market price is
309,800 yuan. But with the subsidies mentioned above, the taxi company can get a BYD e6 at the price of
79,000 yuan/taxi, which is only 25.5% of the market price.
In addition, to avoid the economic loss during the replacement and encourage the companies to adopt
electric taxis ahead of time, Shenzhen government also came up with the solution named “extra emission
reduction by earlier replacement reward”. For example, there is an internal combustion engine (ICE) taxi
bought at the price of 100,000 yuan at the beginning of its 5-year operation period, and its salvage would
be 80,000 yuan at the end of the 5th year, using straight line depreciation method, it depreciates 80,000
yuan/60 months=1,333.3 yuan/month. If the taxi company chooses to replace the ICE with an electric one
in its fourth operating year, then it can get 1,333.3 yuan*12 months=16,000 yuan compensate for this
single car. It is worth noting that the maximum compensation a single taxi can get is 32,000 yuan. This
reward largely reduces the taxi companies burden on replacement. It is estimated that XIHU, the biggest
private taxi company in Shenzhen got 40 million yuan from this policy.
1.1.2 Subsidies to taxi drivers
In Shenzhen, taxi drivers do not own taxis but contract with the taxi company and rent vehicles with
licenses to have the operating right of the car. Typically, each taxi is operated by 2 drivers and costs are
shared (2 shifts/car). Taxi licenses are issued by the government which possess a five-year tenor.
Before taxi electrification, the one-time deposit paid by ICE drivers to the taxi company was 90,000
yuan/taxi, and monthly rent was about 15,000 yuan/taxi depending on different companies’ requirements.
But now, after taxi electrification, the deposit reduces to 40,000 yuan/taxi and monthly rent reduces to
10,000 yuan/taxi. Besides, each taxi can get a subsidy of 1000 yuan directly from the local government
per month, meaning each driver can get 500 yuan, which reduces the taxi’s fixed cost for the drivers to
some extent.
1.1.3 More taxi quotas are added and license restriction is canceled
Taxi quota is strictly controlled in each city in China. Before taxi electrification, there were about 16,000
taxis in Shenzhen. But now, there are 21,700 taxis in Shenzhen, among which 21,485 are electric ones.
11The government aims to motivate taxi companies to adopt electric taxis by adding their taxi operation
quotas and creating a scale of economy for them.
As respect to taxi licenses, prior to taxi electrification, there were mainly two types of taxi licenses in
Shenzhen according to different operation zones and prices - taxis with red licenses can freely drive
anywhere, while taxis with green licenses can only drive outside Shenzhen special economic zone. But
now, to conveniently manage the electric taxis and create a fairer market environment, all license
restrictions are canceled, which is good news for taxi drivers.
1.1.4 Subsidies to charging infrastructures
According to the Development and
Figure 5 Charging Infrastructures in Shenzhen
Reform Commission of Shenzhen
Municipal Government, the latest
subsidy in 2019 to 2020 on charging
infrastructures will decrease because of
the lower cost of charging equipment.
The construction cost of one charging
hub is 1,300 yuan/kW for direct current
charging hub and 700 yuan/kW for
alternating current charging hub
currently. To better balance financial
support and market competition, the
construction subsidy for direct current
charging equipment will decrease from
600 yuan/kW to 400 yuan/kW, and
subsidy for alternating charging
equipment above 40kW will decrease
from 300yuan/kW to 200 yuan/kW; for
those alternating current charging
equipment below 40kW, the subsidy will
reduce from 200 yuan/kw to 100
yuan/kW 15 . Besides financial subsidies,
the government also provided the land to charging infrastructure suppliers for free at the very beginning
of the taxi electrification process to support their development.
1.1.5 Benefits to taxi passengers
To make electric taxis benefit passengers, the government canceled the fuel surcharge of taxis and thus
the start fee reduces from 13 yuan/2km to 10 yuan/2km, becoming the cheapest in the first-tier cities in
China. Adopting electric taxis also became an opportunity for taxi companies to improve service to better
attract passengers. In addition, because of the increasing number of electric taxis in Shenzhen, more taxis
are in the market now, and it is more convenient for people to take taxis than before.
1.1.6 Mandatory government policies
15 Shenzhen Development and Reform Commission, 2019 年 8 月 28 日《深圳市 2019-2020 年新能源汽车推广应用财政补贴
实施细则》(征求意见稿）, http://sf.sz.gov.cn/ztzl/gfxwj/gfxwjyjzj_171008/content/post_2964268.html.
12Besides financial stimulation including subsidies and adding operation quotas, Shenzhen government also
mandates that all taxi companies must replace all of their ICE with electric taxis by the end of 2019.
Combining these policies, it is possible to realize taxi electrification in a relatively short period of time.
1.2 Stakeholders and Reactions towards taxi electrification
Other than the government, the taxi electrification process in Shenzhen is most associated with five other
stakeholder groups: (1) Public taxi companies (2) Other taxi companies (3) Vehicle manufacturing
company (BYD Auto) (4) Charging companies (5) Taxi drivers. A network graph of those stakeholders is
illustrated as below. Deeper shades of color (octagons and arrows) shows more powerful influences.
Figure 6 Stakeholders in Shenzhen Taxi Electrification
1.2.1 Public taxi companies
Among the 64 taxi companies currently operating in Shenzhen, public companies and large-scale private
companies are the biggest winners and the most enthusiastic EV supporters benefiting from the policies
and subsidies. Pengcheng, the newly established state-owned taxi company, was responsible for the pilot
in 2010. Government-provided free licenses and charging infrastructure for the first batch of electric taxis
allowed the company to provide fixed salary for taxi drivers in order to attract volunteers. Without
worrying about risk management, Pengcheng operated the pilot successfully.
Another advocate is Shenzhen Bus Group Co., Ltd, which is a state-controlled, comprehensive public
transportation company owning a sub taxi company called Shengang. The monthly rental fees per electric
taxi (8,808 yuan) is lower than a traditional taxi (11,000 yuan), but Shengang compensated this part of
loss by expanding its scale from 1,600 taxis to about 2,300 taxis. In addition, because of the abundant
capital support from its parental company - Shenzhen Bus Group and its integrated capacity in
transportation, real estate, and property management, Shengang can also make profits from by-product
13industries such as the rest area for taxi drivers beside the charging stations and garages for monthly
maintenance fee.
1.2.2 Private taxi companies
While public taxi companies embraced electrification, private taxi companies experienced a cut-throat
competition and revenue reallocation within the taxi industry and thus have two different kinds of voices
regarding the electrification process.
A private taxi company named Xihu is one of the biggest winners, who took the fullest advantage of
governmental subsidies and reached the scale of economy by replacing all 2,733 taxis with more than
3000 EVs and getting approximately 45% of the cost covered in June, 2018. Xihu supports EVs for another
reason - to get the market shares back from the app-based for-hire taxis which invaded Shenzhen taxi
markets in 2016-2017. With the increasing number of street-hailed taxis, reduced taxi fees, and improved
service quality, traditional taxi companies are more competitive than app-based for-hire vehicles now.
The representative from Xihu company told us they will focus more on improving their fleet management
capacity through better utilizing big data, which includes operating time, location, income, and charging
record provided by digital platforms on each electric taxi.
But small-scaled taxi companies are not so welcoming of the policy. As market competition pushes the
monthly rental fee to lower levels than before, the main method companies use to compensate for the
loss is to scale up. However, small companies lack sufficient capital to invest in new taxis and have
difficulties to hire enough drivers for a larger scale due to relatively weak abilities to provide welfare.
What’s worse, as the large-scale companies showed capability to replace their taxis in a short period of
time, the Shenzhen government moved the policy requirement for full replacement from 2020 to by the
end of 2018. Small-scale companies, on the other hand, struggled with the budget to purchase new EVs
and suffered the low market price of the used gasoline cars. A company named Yachi operating 524 taxis
reported no obvious changes of its income after replacement, but had to take bank loans to pay deposit
money for gasoline cars during the process. Also, small-scale taxi companies are facing more difficulties
dealing with drivers who are unwilling to switch to EVs, because they generally have a smaller
management team and higher mobility of drivers it hires.
1.2.3 Vehicle manufacturing company (BYD Auto)
As the only contractor responsible for every electrical taxi running in Shenzhen from manufacturing to
maintenance, the policy-supported monopoly has hugely benefited BYD Auto. The company has signed
contracts with the taxi companies to change every battery which deteriorates to lower than 200 km per
charge. As EVs in Shenzhen currently require more frequent maintenance and special spare parts which
only BYD can produce, the company will continue to benefit hugely from the situation at least for the
following few years.
1.2.4 Charging companies
Charging companies provide the infrastructure of taxi electrification, therefore are highly influential
during the policy implementation process. The marketization of EV charging stations began in around
2016, but private companies only started to break even and make a profit in around 2019 due to the
increasing number of EVs. They invest in property rent, construction, and management of the charging
site and recover their investments through a service fee which is counted per kWh electricity of the charge.
This is also an industry heavily subsidized by the Shenzhen government, with rigid control of the largest
fee which can be charged. As property related fee is the largest component of charging station costs,
14government providing sites for construction is the most powerful encouragement for charging companies
to enter the market. According to a company named Car Energy Net, the charging supply for taxi and
private Electric Vehicles is now approaching saturation. In the future, charging companies would mostly
impact taxi companies and drivers by investing in research and development activities to shorten charging
time, and providing rest area services beside their charging stations.
1.2.5 Taxi drivers
Taxi drivers in Shenzhen are a diversified group with hugely different opinions about taxi electrification,
but has relatively weak influence on this matter. We interviewed 16 taxi drivers during the field trip.
Shenzhen is a city of immigrants, so most of the taxi drivers are not local people, but people from other
areas who try to earn more money. Drivers opposing EVs are mostly concerned about the waste of time
charging their vehicles and limitations of long-distance drives leading to less income; while others are
satisfied with less rental fee, less deposit money and less charging fees compared to oil expenses for
gasoline cars. Several drivers reported difficulties to use multiple charging apps on their phone as there is
not a united platform for all charging stations in the city. At the beginning of this EV revolution, drivers
wasted plenty of time lining up for a charging spot as the infrastructure was not sufficient, but now almost
no drivers reported long waiting time due to more charging stations built and the efficient driver-oriented
communication groups in WeChat. However, as all drivers are using the same model (BYD E6) no matter
which taxi company they work for, their complaints about this are highly identical. Problems drivers
mentioned include safety hazards caused by heavy weight, delayed braking and A-pillar blind spot, also a
fast deterioration rate of the battery.
Below is a comparison of typical taxi drivers’ daily income before and after electrification. Typically, a taxi
is driven by 2 drivers everyday (2 shifts), we used data we got from 16 drivers and the data we got from
taxi companies. Data from drivers varied dramatically but we tried to draw a brief graph of the change of
their income.
The following chart shows the results of significance from interviewing drivers (1 represents very
dissatisfied, 2 represents somehow dissatisfied, 3 represents moderate, 4 represents somehow satisfied,
5 represents very satisfied).
15Table 4 Income Analysis for Taxi Drivers in Shenzhen
Figure 7 Major Concerns for Electric Taxi Drivers in Shenzhen
161.3 Experience summary
Figure 8 Implementation Stages of Taxi Electrification in Shenzhen
1.3.1 Strong initiator for the promotion of the policy implementation
BYD and Shenzhen municipal government are powerful initiators in this policy. According to many
interviewees, one important reason for the success of taxi electrification in Shenzhen is that BYD, an
electric vehicle maker, can benefit extremely from this policy. This policy is likely to make it the largest EV
maker in China, and can help it gain more market power. For the Shenzhen municipal government,
electrifying all taxis is a great governmental achievement and will be regarded as a beautiful answer to
President Xi's call on green development. Besides, Shenzhen is a city with huge governmental income
which can afford the high cost of subsidies and with BYD in its prefecture, the cost of the policy will be
relatively low. For the Shenzhen government, the benefit for setting a model for green transportation,
having a powerful EV manufacturing company, weighs more than the cost of subsidy.
The initiator should also be strong in promoting the project. For such a huge project, the initiator must
analyze the needs of different stakeholders and incentivize them to accept the project. In Shenzhen, the
government carried this role out enthusiastically. However, we think there are chances that other
companies can act as the promoter instead of governments. For example, if a big company or companies
alliance, consisting of players in EV manufacturing, charging stations, taxi companies or even electricity
generators, can work together and act on replacing taxis with EVs, they will benefit from this project for
this project can actually lower their cost.
1.3.2 Development stakeholders for the pilot period
As a new policy, no one ever knows if it will succeed. Therefore, it is important for initiators to find
implementing agencies and carry out pilot projects. It helps project promoters try out different solutions
and find the best one to scale it. People need trial to see if a method is possible and stakeholders need
trials to learn how to solve the problems incurred by the project. The agencies carrying out trials can be
given enough power and resources to carry out the policy. This will make everyone see that such a project
might work.
In the case of Shenzhen, Pengcheng Company is the agency. It is a newly established public owned
company which is 100% controlled by the government and its parent company Shenzhen Bus Group has
17experience in running electric buses and own charging stations. Pengcheng works differently from
traditional companies; it is given free licenses; it has free access to charging stations and electricity. In
conclusion, it is important to find appropriate trial agencies and each agency should try its best to get
resources and carry out a trial project.
1.3.3 Benefits of every stakeholder should be taken into consideration
Stakeholders will cooperate with the project if they have incentives to do so. In the case of Shenzhen, taxi
companies earn more or the same, taxi drivers can earn about the same amount of income, charging
station companies and EV manufacturing companies expanded their market size, (BYD, especially, get
monopoly in Shenzhen’s taxi market), customers enjoy lower prices and better service. In conclusion, it is
almost a Pareto Improvement. Some may say this policy is successful because Chinese government has
absolute power. However, this is not the truth. The key reason for the success is that Shenzhen Municipal
Government uses comprehensive methods to adjust the benefit of every stakeholder and give them offers
that they would prefer to accept after considering the cost and benefit.
2. Taiyuan Case
Taiyuan, Shanxi is another city in China whose taxi fleets have been 100% electrified. Although our team
don’t conduct field trip in Taiyuan, we get the following information from another research team in
Renmin University16.
2.1 Why Taiyuan electrifies its taxi fleets so fast?
From February to April 2016, Taiyuan converted all of its 8,292 taxis into electric vehicles. The vehicle
type is BYD e6, which is the same as Shenzhen. However, different from Shenzhen’s three promotion
phases on taxi electrification, Taiyuan electrified its taxi fleets in a shorter period of time. The reason
behind such fast action is that Taiyuan renewed its taxis in the end of 2007 and the beginning of 2008.
According to the retirement rules in China, the maximum running period of a taxi is 8 years. Therefore,
2016 is just a time for Taiyuan to renew its taxi fleets again.
2.2 Subsidies on Purchasing Vehicles
Similar to Shenzhen, the Taiyuan government also provides subsidies for electric taxis. But there is no
subsidy for taxi drivers, which is different from the situation in Shenzhen. In addition, BYD also provides
one complimentary replace of battery for one vehicle.
With the subsidies, taxi companies’ purchase cost of electric taxis is lower than market price. Take BYD
e6 as an example, its original market price is 309.8K RMB. With 100K RMB Municipal government
subsidy, 50K RMB Provincial government subsidy, and 50K RMB Central government subsidy, the price
for companies to purchase a BYD e6 is only 109.8K RMB, which has largely reduced taxi companies
burden on taxi replacement.
2.3 Charging stations
18National-owned charging stations began to run at the same time with the conversion and after that
private- owned charging stations began to burgeon. Now, there is even a discount on charging price in
private owned stations due to the abundant amount: there are now around 120 charging stations in
Taiyuan, which can satisfy drivers’ charging needs.
2.4 Drivers' attitude
For drivers, they are mostly concerned about the charging time because this leads to less running time
and less income. However, they are satisfied with the service and price of charging. The average
satisfaction score is 54 (on 100 scale)17. This result is derived from a survey on 10 drivers conducted in
January, 2020.
3. London Case
3.1 Background
3.1.1 ULEV: Ultra Low Emission Vehicle
The UK Government is committed to achieve by 2050 almost every car and van in the UK will be an ultra
low emission vehicle (ULEV) 18 . In order to support the early market for electric and other ultra low
emission vehicles (ULEV), the UK government formed the Office for Low Emission Vehicles (OLEV) in 2009,
a cross government, industry endorsed, team combining policy and funding streams to simplify policy
development and delivery for ULEVs.
3.1.2 Mayor’s Taxi and Private Hire Plan
London is at the forefront of the zero-emission revolution with more than 20,000 electric vehicles, 1700
electric taxis and Europe’s largest electric bus fleet. In 2016, Transport for London (TfL), part of the Greater
London Authority family of organizations led by Mayor of London Sadiq Khan, published the Mayor’s Taxi
and Private Hire Plan. It set the goal that London is going to deliver the greenest taxi fleet in the world.
3.1.3 London’s Taxi Industry
London’s taxis have a long history and they provide a reliable service to Londoners, tourists and business
people from home and abroad. Today, companies such as Hailo and Gett have been at the forefront of an
app revolution, as smartphones have transformed how many of us organize the way we travel. Crucially,
all taxis are fully accessible for wheelchair users.
Currently, there are around 20,100 licensed taxis in London. TfL is responsible for licensing vehicles. There
is a 15-year age limit for taxi vehicles.
The taxi industry is preparing to play a vital role in the future of a greener, cleaner Capital city, and will
have a key part in tackling London’s toxic air. A number of taxi manufacturers are working on the next
19 Office
for Low Emission Vehicles, “Driving the Future Today: A strategy for ultra low emission vehicles in the UK”, September,
2013, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/239317/ultra-low-
emission-vehicle-strategy.pdf
19generation of vehicles offering significant environmental benefits and an improved travelling experience
for customers.19
3.2 London’s Pathway to Taxi Electrification
3.2.1 Ultra Low Emission Zone
Since April 2019, London has started to run an Ultra Low Emission Zone, or ULEZ in Central London. The
ULEZ operates 24-hours a day, seven days a week. Vehicles which do not meet the ULEZ’s emissions
standards are required to pay a daily charge to drive in the zone. Currently, taxis with a London license
are exempt from the charge, although there is a 15-year age limit for the vehicles. However, with TfL
raising standards for newly licensed taxis since 2018, we are still monitoring how the ULEZ policy will
change towards taxis. ULEZ has already reduced emissions of nitrogen oxides (NOx) by approximately 29%
since it was introduced.
Figure 9 Ultra Low Emission Zone in London
3.2.2 Taxi delicensing
TfL has restructured and enhanced the taxi delicensing scheme, with £42m available for taxi drivers who
delicense their vehicles. If owners have a diesel taxi that is less than 14 years old, they may be able to
20
Transport for London, “Taxi and Private Hire Action Plan 2016”, http://content.tfl.gov.uk/taxi-and-private-hire-action-plan-
2016.pdf
20surrender their taxi vehicle licenses and plates in exchange for a payment from TfL20. This way can help
accelerate the replacement of traditional diesel taxis.
Table 5 Eligible vehicle categories for delicensing
3.2.3 Zero Emission Capable (ZEC) taxis requirements
On 1 January 2018, the London government introduced licensing requirements to reduce emissions from
the taxi fleet by phasing out diesel taxis and increasing the number of ZEC vehicles in London. The
maximum 15 year age limit remains in place. The new requirements include:
a. Since 1 January 2018, taxis presented for licensing for the first time have needed to be ZEC. This means
having CO2 emissions of no more than 50g/km and a minimum 30 mile zero emission range
b. First-time taxi vehicle licenses are no longer granted to diesel taxis. ZEC taxis with petrol engines need
to meet the latest emissions standard (currently Euro 6).
Currently, there are two models that meet the ZEC taxi emissions standard: LEVC’s (London EV Company)
TX model, a plug-in hybrid EV taxi developed by Geely, and Nissan’s NV 200 model, a BEV taxi model. The
introduction of the new requirements means that newly-licensed taxi models in London will be either TX
model of Nissan NV 200.
To help drivers get a ZEC, the London government funded a government-led plug-in vehicle grant, which
will give taxi drivers up to £7,500 off the price of a new ZEC taxi.
3.2.4 Infrastructure
a) Charging the ZEC vehicle at home
Taxi drivers can charge ZEC vehicles at home overnight. There are government grants available for drivers
to install charging infrastructure at home. For those who do not have off-street parking, the local authority
may be able to install charge points near the drivers.
20
Transport for London, Taxi Delicensing, https://tfl.gov.uk/info-for/taxis-and-private-hire/taxi-delicensing-scheme.
21b) Charging during working hours
In order to make it more convenient for taxi drivers to charge their ZEC vehicles at public charging
points, the London government is working to deliver 300 new rapid charge points by the end of 2020,
and a significant number of which will be dedicated for taxi use only. Currently, there are over 200
charge points that have already been installed. At Zap Map, drivers can filter for "taxi-only" charging
points and can see whether a particular charging point is currently available or occupied.
The government also built 10 Q-Parks in London, which are parking lots with rapid charge points. Drivers
having a ZEC taxi can get free access to the rapid charge points in the 10 Q-Park car parks. They can stay
for up to an hour to charge their vehicles with an entry fee of £2. Taxi drivers can claim back the £2
entrance fee by submitting a claim form to TfL and get reimbursement. However, all costs payable to
charging will be covered by the drivers themselves and additional parking fees besides the maximum 1-
hour charging will not be paid by the government. To claim back the £2 entrance fee, taxi drivers must
collect and retain a receipt every time they exit the Q-Parks as receipts will be required to support their
submission for a reimbursement claim to TfL.
3.2.5 Subsidies
The Office of Low Emission Vehicles (OLEV) offers a range of grants and assistance to help drivers make
the switch to electric vehicles.
a) Plug-in electric car grant
Because most electric vehicles are brand new, their price can seem higher than comparable petrol or
diesel cars at first glance. To help overcome this, the government introduced a special plug in electric car
grant to help buyers offset some of the cost of a new electric car.
This grant is available on a range of eligible electric vehicles including cars, vans, motorcycles, mopeds,
taxis and even large trucks. To qualify for the plug-in electric car grant the EV that you buy must have
emissions of less than 50g/km and a zero emissions range of more than 70 miles. The maximum grant
available for new electric cars is £3,500 while the maximum for a new electric van is £8,000. The subsidy
for EV taxis currently is £7,500.
b) Electric vehicle charging scheme grant
There are additional OLEV grants available to help cover the cost of electric vehicle charging
infrastructure.
OLEV provides grant funding of up to 75% towards the cost of installing a domestic charging station at
home. The benefits of this are huge as drivers will be able to charge EVs overnight for a fraction of the
cost of filling up a conventional car with petrol or diesel. The electric vehicle charging scheme grant
provides up to £500 towards the installation of a home charging station.
22IV. Identified Problems
1. Charging Infrastructure
1.1 Rate design
ConEd now offers some options for EV owners as an incentive for owning EVs. Owners have the choice
to choose using traditional metering method but this leads to high electric expense. Or, they can choose
one of the two incentive methods: the first one is to adopt the Time-of-Use method and ConEd will
calculate and compare the yearly expense with traditional use for the first year and charge the less one.
The second choice is set-up a separate meter for EV. ToU price is as below. This is the price for delivery,
a separate supply fee will also be charged. The supply price is market-based and is shown below.21
Table 6 Time-of-Use periods and rates & Standard Residential Rate
21ConEdison, "Electric Vehicle Rate", https://www.coned.com/en/our-energy-future/technology-innovation/electric-
vehicles/electric-vehicles-and-your-bill; Market Supply Charge Calculator,
https://apps.coned.com/CEMyAccount/csol/MSCcc.aspx.
23Table 7 Market Supply Charge Calculator
1.2 Infrastructure
Although the Mayor’s Office of Sustainability (MOS) and Department of Transportation (DOT) have the
plan to build 7 DC fast charging stations in five boroughs across NYC by the end of 2020, the reality is quite
unsatisfying. According to the interview, only 2 of the 7 started construction in 2019, and the construction
of the remaining 5 stations may be postponed for lack of money and COVID-19. Having enough fast
charging stations is the prerequisite for promoting electric taxis in NYC and to meet the drivers’ charging
needs.
1.3 Technology Standards
There are mainly five different charging connectors in NYC now. Although the level 2 chargers will come
with a standard SAE J1772 connector that is compatible with most EVs, the connectors for DC fast charging
stations are not unified. We think it would be better if the potential electric taxi companies can cooperate
with charging infrastructure suppliers and unify a type of connector for electric taxis. In this way, taxi
drivers can charge their vehicles more conveniently and quickly.
24Table 8 EV charging types
1.4 Charging time
Ideally, it takes around 30 minutes to charge an EV taxi with a DC fast charger. However, according to the
experience of the Shenzhen case, because of the depreciation of the battery and the variance of
performance across different EV models, taxi drivers normally spend 40 minutes to 2 hours to charge their
taxis per shift. The charging time is much longer compared to the time a driver devotes to fueling.
According to a TLC study on the fueling habits of taxi drivers, drivers spend about 6.25 minutes on fueling
each shift. As many taxis in New York City are still double-shifted, longer charging time may not be efficient
from drivers’ perspective and will not be easily accepted.
Another problem with the charging time is that it might lead to clustering at chargers. For most of the
double-shifted taxis, shift change occurs in a tight timeframe, and drivers would want to avoid passenger
peak hours to make more money. Therefore, a large number of shift changes usually occur at a specific
time of a day. The cluster of shift changes may cause clusters at chargers.
1.5 Land
A Level III charger is essential for a taxicab to operate in the city. However, in places like Manhattan, it is
complicated to provide land to build enough charging infrastructure. It will be a huge cost for
infrastructure companies to purchase or rent the land.
2. Drivers' Willingness
Drivers are one of the most important stakeholders in this process of switching from oil-powered taxis
to Electrical ones. Three main elements drivers care about the most are: convenience, profitability, and
stability. Potential negative influences reside in all these elements if change in the industry are not
guided with careful policies and regulations, and could result in strong resistance from the drivers’
community.
New York City taxi drivers are already under huge pressure from decreasing income influenced by a
growing number of app-based taxis, longer shifts and relatively low capacity utilization rate (for
25traditional taxi drivers)22. Therefore, we find it extremely important to design a moral and inclusive
pilot project for drivers to fulfill their demands and reply to their possible concerns. We identify the
following three problems to be the major potential concerns for drivers in the early process of
electrification: charging availability, income changes and adapting to EV models.
2.1 Charging availability
Charging availability is recognized as the most important concern based on our case study in Shenzhen.
Due to the improvement of battery technology, the capacity of batteries is relieved but as we discussed
above, charging technology is still in lack. It is hard to find a cheap and fast way to charge the long-range
batteries. Using Level-2 chargers, it will take about 8 hours to charge a 200 miles range battery. Using a
DC fast charger, it will use only 30 minutes but will cost more than $15 for a single charge. For an electric
taxi driver, there will be two choices: charging at day time working hours using DCFC or charging at night
time using a home-installed level-2 charger. For the first choice, drivers would have to waste some of
their working hours and drive longer shifts to obtain the same income, and there’s still a very limited
number of DC charging stations in the city which might result in long lines waiting for a spot available.
For the second choice, large amount of investments will be needed to install level-2 chargers at or near
to drivers’ homes.
2.2 Income changes
Income is definitely of concern to drivers. Apart from the charging issue discussed, limited range might
constrain the range of service and diminish driver's income. If a driver is running on a low battery
capacity, they have to give up long distance trip such as the ones travelling to Airport. However, good
news is that a fast charging station in the airport is on the plan of NYPA's EVolve NY. Take 2019
December for example, for yellow taxis, there were about 6 million trips. Among the 6 million trips,
there were 8018 trips longer than 27 miles. Among the 8018 trips, there were merely 2125 trips that
were not starting or ending at an airport. That's to say, though 99.97% of trips are safe with EVs, there
are some services provided now that cannot be fulfilled by EVs.
2.3 Adapting to EV models
Driving habits of a driver are subject to different vehicle models. According to Shenzhen’s experience,
getting accustomed to driving EVs requires effort. Although the majority of drivers in Shenzhen has
reported a rather short breaking-in period as basic driving techniques of an EV are similar to a gasoline
vehicle, there are still certain characteristics of the car model causing them troubles. BYD e6, the
universal EV used for all taxis in Shenzhen, are heavier than average gasoline vehicles and accelerate
faster, which could require additional training to avoid potential safety hazards. If similar problems exist
for EV models used in NYC, drivers might need extra support helping them to handle this change.
Another factor is the change of drivers’ time arrangements. At present, a full fast charging process
would take a driver 0.5-2 hours. Compared to a gas refills only taking a few minutes, drivers would need
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