New York City Mayor Michael Bloomberg ordered all city taxis to operate on hybrid engines by 2012 as part of his drive to reduce air pollution. Currently New York has around 13,000 taxies among them only 375 operate on hybrid engines.

Currently city's conventionally powered cabs get about 14 miles (22.5 kilometers) a gallon of gasoline. New York Mayor plan to raise this to 30 miles a gallon. If New York achieves this, it will be the largest, cleanest fleet of taxis anywhere on the planet

The conventional to hybrid transition will happen in stages over five years as older cabs are retired.  From now on, taxi owners will have to buy hybrid vehicles, which cost less to operate and emit less exhaust.
New York City is also switching vehicles such as garbage trucks and buses over to those running on hybrid engines as they become available. The city so far has approved nine gasoline-electric hybrid vehicles for use as taxis.

The city Approved following models as taxi cab: 2006 models of the Toyota Sienna CE, Prius and Highlander, the 2007 Toyota Camry Hybrid and the 2006 Lexus RX400H, 2006 Honda Accord and Civic, 2006 Ford Escape and Mercury Mariner and 2007 Saturn VUE Green Line.

By October 2008, there will be 1,000 hybrid taxis, the press release said. The gasoline-electric cabs will then increase at a rate of 3,000 a year until the city's taxis are all-hybrid by October 2012, according to the timetable. The new rules will cut the carbon emissions of taxis and for-hire vehicles by half in 10 years and reduce the fuel costs of individual taxi operators an average of $10,000 a year, the release said.
 
To help the city meet its goal, Yahoo! Inc. said it will donate 10 hybrid Ford Escapes to a city fleet operator. This announcement expected to provides an opportunity for automakers to grow their hybrid business.