Bay Area taxi cabs are taking a different turn in 2011. The cities of San Francisco and San Jose have partnered with Better Place, an electric mobility service provider in Palo Alto, to construct four switch stations for a fleet of up to 70 plug-in taxis, according to an announcement by San Francisco Mayor Gavin Newsom on Oct. 27.

The three-year pilot program stems from a collaborative project between San Jose, San Francisco and Oakland to make the Bay Area “the EV [electric vehicle] capital of the world,” said Jeff Janssen, senior policy advisor to San Jose Mayor Chuck Reed.

Debuting in 2008, the Bay Area Climate Collaborative has garnered $44 million in funds from several sources, including the Metropolitan Transportation Commission (MTC), in order to implement four EV projects across the nine counties of the Bay Area region.

The group’s first step is to educate people about the significant green benefits of EVs, and this particular program will receive $7 million of MTC funds and $100,000 from San Francisco. Janssen said Better Place will be matching the MTC contributions with $8 million, although the company’s spokeswoman, Julie Mullins, denied the release of any specific amount.

Since cab drivers cannot stop to physically plug in and recharge, each participating city will have two battery switch stations and six taxis in phase one, followed by 67 more vehicles in phase two. Janssen said a fifth station may be deployed in the Peninsula, close to Better Place headquarters.

“[We want] to prove that you can use electric vehicles for everyday use, and nobody drives more than a cab driver,” Janssen said.

Because taxi cabs hold the record for the largest carbon footprint, Mullins said, this vehicle segment acts as the best educational catalyst. According to research conducted by Better Place, although there are fewer cabs than personal cars on the roads, cab drivers cover an average of 90,000 miles per year, approximately nine times more than most drivers, said Mullins.

While the Better Place taxi venture will be the first of its kind in the U.S., the company has already implemented similar programs in Israel, Denmark and most recently in Japan, where taxis make up two percent of traffic but 20 percent of carbon emissions.

“We were invited by the Japanese government two years ago to start the project there, to show research technology to the Japanese automaker community,” Mullins said. “They were so impressed that they invited us back.”

In fact, Better Place has been so successful at electrifying a city’s fleet of taxis, the company is also bring electric taxis to Australia at the end of next year.

But these vehicles are green in other ways as well—they can save cab companies money. EVs cost 3 cents per mile to operate compared to 13 cents per mile for a gas-fueled taxi, according to a statement by Melanie Nutter, environment director of San Francisco.

“If you’re looking at the price per mile for gasoline versus the price per mile for electricity, it’s substantially different, especially when you’re filling up with a full tank of gas two or three times a day,” Mullins said.

Moreover, if you are a driver in San Jose, having an electric car could help drum up business. The city will be providing additional airport permits to companies that have EVs, which will allow more taxi cabs to operate at the airport.

“In San Jose we don’t have a lot of taxi traffic,” Janssen said. “Our biggest source of traffic for cabs is at the airport so the permit will become a valuable incentive.”

Although Mullins said the project is in its latter stages—finalizing partnerships with automakers, battery providers and the like—she declined to include specific details about the list of prospective companies, except to confirm a partnership with Yellow Cab to supply the drivers. But Mullins is confident that decision will be made in time for its official debut late 2011.