Benefits of Decreased Fuel Consumption
Currently cab drivers are very sensitive to changes in gas prices. As can be seen from the graph below changes in the average MPG of a vehicle can severely affect the amount of money spent on gas per year. This graph was made with the assumption that a taxi drives about 50,000 miles in a year.
Overall Fuel Costs
Overall fuel consumption depends on the amount of miles a car gets per gallon of gas (MPG). As the MPG increases lower amounts of fuel is burned per mile. At a price of $2.50 per gallon a 10 MPG vehicle will spend $12,500 for each 50,000 miles driven, while a 40 MPG vehicle will spend $4,167 - a savings of $8,333 per 50,000 miles.
Price Insensitivity
If you follow one vehicle on the graph (e.g. the 10 MPG vehicle or the red line) you can see how sensitive the cost of gas per 50,000 miles is to changes in gas price. For example, a change in gas price from $2.50 to $3.50 per gallon will increase the cost of gas by $5,000 in the 10 MPG vehicle vs. $1,250 for the 40 MPG vehicle. This means that hybrid taxis will be less sensitive to changes in gas price and will be able to keep constant prices and better compete against taxi companies operating regular vehicles.