New York City—Residents and visitors alike marvel that this city’s fleet of 13,200 yellow cabs has gotten far more diverse. The sea of Ford Crown Victorias is now sprinkled with hybrids, most of them Ford Escape Hybrid SUVs. Also visible are occasional Toyota Priuses, Nissan Altima Hybrids, Toyota Highland Hybrids, and at least one bright yellow Lexus LS400h.

But now a new report says that the hybrids are “unfit and unsafe” for their duties, endangering 240 million passengers and tens of thousands of drivers. And the Metropolitan Taxicab Board of Trade (MTBoT), a taxi-fleet trade association that commissioned the 43-page report, has sued the city over the issue. Their goal is to halt a mandate, scheduled to take effect October 1, requiring all new cabs to obtain a city mileage rating of at least 25 miles per gallon (rising to 30 mpg a year from now). The mandate become law in May 2007, at the behest of Mayor Michael Bloomberg—following limited sales of hybrid-only taxi medallions in the three prior years.

The MTBoT complains that no current hybrid is designed to accept the bulletproof partitions between driver and passengers that are required for all cabs. The partitions, says the report, interfere with side-curtain airbags; force drivers too close to the steering-wheel airbag; may dislodge in accidents; and cut passenger legroom as much as 10 inches.

The lawsuit charges NYC’s Taxi & Limousine Commission (TLC) with failing to follow its own procedures requiring safety testing and a pilot program. For good measure, it also argues that the city’s mandate is pre-empted by the federal Energy Policy and Conservation Act, and the federal Clean Air Act—the same argument made by automakers against California’s stricter emissions standards.

The law fought by the MTBoT is in line with the city’s comprehensive PlaNYC 2030 blueprint to reduce energy use, handle 1 million more residents, and cope with aging infrastructure. Because cabs must now be retired after three years—at which point they can have 250,000 to 300,000 miles—this means the entire fleet will more than halve its fuel usage and emissions by 2013. The TLC auctioned a limited set of special medallions just for hybrids in 2004, and the mandate followed a few years later. The first Escape Hybrid hit New York streets in November 2005, to rider acclaim. (Vancouver cabbie Andrew Grant used a Prius taxi starting in 2001.)