U.S. Court Blocks Nissan’s Taxi Deal with New York City

New York state's Supreme Court has tossed out a $1 billion contract that gives Nissan Motor Co. exclusive rights to supply New York City with taxicabs for the next 10 years.

New York currently allows taxi operators to choose among 16 models of cars, vans and crossover vehicles. About 13,200 cabs operate in the city. Operators filed a lawsuit late last year that claimed the city overstepped its authority in reducing their options to a single "entirely untested" design.

The New York court ruled that city agencies lacked the authority to mandate a single vehicle for taxi use and then contract with one vendor to supply all those vehicles.

Nissan says it will move ahead with plans to begin selling its taxi, a variant of it NV200 van, by the end of October. The company will produce the $29,700 vehicles in Cuernavaca, Mexico.

Nissan won the giant contract in 2011 in a three-way competition with Ford and Turkey's Karsan Otomotiv for what New York touted as the "taxi of tomorrow." Among the features in Nissan's design are power outlets for phone and laptop computers, a see-through roof, reading lamps and anti-bacterial seating surfaces.