I feel your pain

All you pedicab owner-operators, let me just say, "I feel your pain" when it comes to finding insurance.

We've been on the hunt for insurance for our new pedal cab operation, Colorado Rickshaw Company, and it's been UGLY! The options are limited, for sure, and the costs, restrictions and exclusions are all over the map. In recent weeks I've gotten a real education in a subject I didn't want to know that much about.

From what we hear from operators across North America, insurance is the biggest issue they face. Drivers may be the biggest hassle, but overall, the biggest concern is insurance.

There just aren't a lot of options. The coverage offered by some providers is questionable. Unfortunately, in order to operate, a lot of companies buy whatever is cheapest and still meets the requirements. They may think they're covered, but are they really?

I don't claim to be an expert in insurance, and I'm not going to tell you which insurance policy to buy, or which providers are the best. It really depends on your own particular circumstances, how your business is structured, and your tolerance for risk. What I can tell you is that there are significant differences in policies from one provider to the next.

Here are some questions you may want to ask before you plunk down a large chunk of cash:

• Has the insurance you're considering ever paid a claim? If so, what were the circumstances?
  
• If you report an incident, even if it never becomes a claim, are you charged a reporting or research fee?
  
• What is included and what is excluded?
  
• Is the insurance based on claims made or occurences? Either may be okay, but may require different reporting procedures, and the total deductible may change. (For example, if three passengers in an accident each file a claim, the deductible may apply to each passenger rather than the entire incident, thus tripling your out-of-pocket expense.)
  
• If a driver has an incident but doesn't report it, are you covered?
  
• Is there a deductible? If so, do you have enough in reserve to cover it?
  
• Are the drivers covered, or just the passengers? What about damage to the cabs or other property like cars?
  
• If you have a manager, assistant manager, or mechanic, what is their coverage under the policy?
  
• At what point does this insurance take over? Some policies only cover expenses in excess of those covered by motor vehicle or health insurance.
  
• Are the pedal cabs covered for damage, fire or theft? Does that coverage apply to street use, storage, or both?
  
• Is coverage limited to a specific geographical area like a city, county or region? Or can you take your cabs to an event like an airshow or car race outside of your general footprint? Does coverage extend to transport to or from an event?
  
• Is there an age limit for drivers?
  
• If the policy requires a "clean driving record," what does that mean? If someone gets a traffic ticket after they're approved, what happens?
  
• Are there any benefits for having safety equipment like lights and seat belts?
  
• Are there any benefits for having a training & street monitoring program in place?
  
• Do you have the ability to increase or decrease the number of cabs in your fleet?
  
• Is anything else included in the coverage like legal fees, etc.?
  
• Can you review a copy of the policy before you buy?
  
• If you change to a new insurance provider, are you covered by the original provider for incidents that happened while you were insured by them?

Other things to consider when choosing your insurance coverage are:

• Do you have written reporting procedures in place?
  
• Have you put into place any other systems to limit your liability?
  
• What are the driver's responsibilities in an incident?
  
• How well are your cabs maintained, and do you keep records?
  
• If your drivers aren't covered by your business insurance, do they have any other coverage in place like regular or catastrophic health insurance?

It takes time to evaluate your options. Plan to start looking for new insurance 4 to 6 weeks before you actually need it. Since pedicab businesses are still a nontraditional industry and there aren't any actuarial tables yet, brokers often need time to gather all the information required by the underwriters.

Changes coming to San Diego

New rules may bring pedicabbies to heel

By Helen Gao
UNION-TRIBUNE STAFF WRITER
April 4, 2008

SAN DIEGO – Pedicabs have proliferated so much in downtown San Diego over the past decade, the city is planning tougher regulations to rein in the muscle-powered three-wheelers.

Overview
Background: More than 400 pedicabs operate in San Diego, mostly in the Gaslamp Quarter, at the waterfront and near Petco Park.

What's changing:
The city, working with pedicab owners and police, is trying to develop better regulations. A proposed ordinance calls for limiting the number of pedicabs in certain areas and requiring them to prominently post fares and other vital information.

The future: The ordinance is being presented to community groups for input. It's expected to reach the City Council in the fall.

Working with police and downtown businesses, city regulators are proposing to restrict the number of pedicabs in certain zones and require all to prominently post fares.

Zones would be carved out in downtown, Ocean Beach, Mission Beach, Pacific Beach and La Jolla. Only a certain number of pedicabs with special decals would be allowed in those zones, but how many has not been determined.

Pedicabbies with a city permit currently can roam pretty much anywhere in San Diego to pick up passengers. They are concentrated along the waterfront, Gaslamp Quarter and around Petco Park. If a limit on pedicabs is set, those without restricted-zone decals would have to find fares elsewhere.

The proposed ordinance also includes safety and consumer protection measures. For example, pedicabs would have to be marked with numbers assigned by the city and the company's name and phone number – requirements meant to give consumers information for calling in complaints.

The ordinance would reiterate that the California Vehicle Code applies to pedicabs; some drivers have been accused of being reckless. Pedicabbies would have to carry proof of insurance, and their vehicles could be impounded if the operators lack a valid California driver's license.

Pedicabs also would be prohibited from being parked in metered spaces. Downtown businesses have complained that pedicabs take up spaces meant for patrons. Zones where pedicabs can pick up and drop off passengers would be created instead.

Brad Jacobsen, a city associate traffic engineer, said pedicabs have reached a saturation point.

“There are some problems with sheer numbers. You do reach a threshold where it ceases to be a street ambience, where it starts to become a little bit of a nuisance,” Jacobsen said.

“We want to strike that balance. We think by putting a little bit more restriction on this and by bringing the numbers down a little bit, it will really benefit the businesses.”

Police estimate there are more than 400 pedicabs in the city. Some already post their fares. Drivers typically lease their vehicles from companies. How much they make depends on their ability to lure passengers.

At peak times, such as the summer or during major conventions, the ranks of pedicab drivers swell. Many come in from out of town and some arrive from out of the country.

“It gets really bad when everybody comes in from Russia, Poland, Turkey and Brazil,” said Holmes Walton, a local who has been driving a pedicab on and off for three years. “The market just gets flooded.”

Joao Ferreira of Brazil, who has been driving a pedicab for about three months, agrees that there are sometimes too many pedicabs, creating an environment that is “bad for business, bad for sidewalks and bad for traffic.”

Jacobsen said the city hasn't decided on a method to distribute the decals.

“We are trying to do this in an equitable manner so nobody corners the market,” he said.

The proposed ordinance is being floated around different communities for input and is expected to go before the City Council in the fall.

Jimmy Parker, executive director of the Gaslamp Quarter Association, which represents more than 400 businesses, welcomes better regulation.

Parker has heard anecdotal complaints about unfair charges for rides, so he is pleased with the proposed requirement to post fares. Most of the complaints he has heard are about pedicabs being on sidewalks, driving recklessly and taking up parking spots.

While the proposed regulations have drawn favorable reactions downtown, the La Jolla Traffic & Transportation Board has expressed skepticism.

Board member Joe LaCava is concerned that pedicabs would disperse from downtown to places like La Jolla, where they may not be wanted.

“If you've got a problem downtown, fix the problem downtown,” LaCava said. “Don't do anything that might push the problem elsewhere.”

Jacobsen said the reason why zones are being considered outside of downtown is to address the potential problem of pedicabs migrating outward.

Downtown motor Officer Scott Thompson believes once the stricter rules are in place, fly-by-night operations – and some of the problems – would disappear. Thompson stressed that pedicabs provide a valuable service for tourists and he wants to see them stay.

“We are just trying to make the industry more viable rather than tear the industry down,” he said.

[Thanks to my big brother for the heads up on this news.]

Discounted pricing extended!

We've extended the discounted price on the Pedicab Operators Weekend through the weekend. Register by the end of the day Monday, March 3, and SAVE!

History: What hurt pedicabs in NYC?

If you've ever wondered what lead up to all the pedicab regulation hoopla in New York City, this 2005 article from Business Week should give you a little background. Some of the predictions haven't been realized and may never happen, but pedicabs are still rolling in NYC and around the country.

Pedicabs Steer a Hard Road
The human-powered cabs are familiar sights in big cities, despite regulations and insurance woes that can make this business a very rough ride

On a mild winter day in January, the phone won't stop ringing in the office above George Bliss's garage. Between calls from drivers who want to lease a cab for the day, the 50-year-old owner of Pedicabs of New York recounts the challenges of the past year. He has sold half of his pedicabs to cover the rising insurance premiums, which have doubled from a year ago.

He adds that some of the newer operators mistreat tourists and aren't driving safely, tarnishing the image of pedicabs. "They don't uphold standards," he says. "It's a tragedy."

PEDAL PEDDLERS. The unusually warm winter weather, prime operating conditions for pedicabs, isn't helping his mood, either. Since Bliss is between insurance policies for a few days, he refuses to let drivers ride without coverage, instead directing inquiries to a competing operator.

There was a time, not so long ago, when very little in rough-and-tumble New York could be called good, clean fun. Now, in the amusement-park ambience of Times Square, gourmet popcorn stores have replaced peep shows. Pedicabs, too, have increased in number with the sanitized scene. Some 200 of these modernized, bicycle-powered rickshaws prowl Midtown, up from just a handful 10 years ago.

Their numbers suggest times are good for operators of this novelty transportation. But for all the expansion of the pedicab niche, the business has its share of growing pains -- from rising insurance rates to impending regulation and increasing competitive pressures.

AT THE CROSSROADS. Indeed, Bliss and the rest of the nascent pedicab outfits in New York are at a crossroads. In order to keep growing, operators want to build a reputation as a safe alternative to traditional taxis. But without standard practices and equipment, insurance companies find pedicabs unsavory clients.

"Sometimes underwriters pull pricing out of the air, since there's not much history," says Scott Ziller, an agent at McKay Insurance Agency, based in Knoxville, Iowa, one of the few sellers of pedicab insurance in the country. McKay handles policies for 30 pedicab businesses, representing about 500 drivers, including five outfits in New York.

Operators say they're willing to give up the freedom of not being regulated to bring more legitimacy to the sector. The goal is to find the right balance of ensuring public safety and promoting entrepreneurship. "I'm looking forward to regulations, provided the city doesn't overregulate us," says Peter Meitzler, owner of Manhattan Rickshaw, operator of 13 pedicabs. New York officials are still debating what form those regulations might take.

DIDN'T STAY IN VEGAS. Cities across the country have handled burgeoning pedicab businesses in different ways. In 2002, Santa Barbara, Calif., demanded that drivers apply for city permits. To do so, applicants have to provide a driver's license and proof of insurance. The city also performs background checks on drivers, and it reserves the right to revoke licenses if pedicabs aren't in good operating condition.

Las Vegas last year banned the vehicles from the Strip, where the bulk of the city's pedestrian and tourist traffic takes place. "Pedicabs were causing a lot of conflict," says Sandra Avants, chairman of the Nevada Transportation Services Authority, referring to accidents and various complaints from limo drivers.

The city subsequently granted pedicabs the right to operate in a limited area, as long as they carry insurance. "We didn't want to restrain the business from operating unless there was a public-safety issue of health and welfare of passengers and those sharing the road with pedicabs," says Avants. However, because the Strip ban took away the operators' most lucrative turf, they have virtually disappeared from Las Vegas.

"NEW YORK WAY." Sin City, with its throngs of tourists, bares more similarities to the Big Apple, but banning pedicabs won't likely be the "New York way," says Gretchen Dykstra, commissioner of New York City's Department of Consumer Affairs. "We don't want to go too far, but if there is a fatal accident with a pedicab, then there might be a cry to ban them all together," Dykstra says. For now, it's not clear when pedicabs will get their own set of rules, or what form they'll take. "We are still exploring the possibility of a regulatory scheme," Dykstra says.

Of course, regulations could also have the effect of keeping newer, and sometimes unscrupulous, operators from entering a very competitive market for transportation services. Competition has increased as the city's horse-and-carriage operators enter the trade, along with individuals who own only one or two pedicabs. "We want to keep renegades out," says Meitzler, referring to those who operate without insurance and flout traffic rules.

Bliss says he has trained 100 pedicab drivers over the years, but he adds that only 25 actually took to the roads. Besides customer rejection, drivers have to navigate New York traffic and brave noise, pollution, and bad weather. "It's the selling that's the real challenge," Bliss says.

ROLLING BILLBOARDS. And training drivers doesn't mean they won't take that knowledge to work at a competitor. Bliss, who owns 12 pedicabs now, admits his cabs are older, so drivers he trains often defect to rivals with newer, spiffier vehicles that are easier to drive.

Meitzler, who worked with Bliss previously, has been running his business since 1995, but still hasn't made a profit. "The business doesn't start to turn unless I have advertising" on the pedicabs," says Meitzler, a legal assistant by day. "I couldn't live off of pedicabs," he says. Still, with some additional ad revenue he's hopeful that 2005 will be his first profitable year.

Regulatory changes or not, Bliss and Meitzler anticipate new opportunities down the road. Both are trying to find new advertisers. Altoids paid about $700 per month to advertise on each of Bliss' pedicabs. Meitzler says he has gotten interest from Broadway shows and winemakers. Target and Unilever, maker of Axe body spray, placed ads last year. Meitzler helps operators in other cities start their own pedicab businesses.

HERE, THERE, ALL OVER. Bliss is "strategizing around historic tours," planning to charge $50 for a 50-minute guided pedicab ride. He also aims to expand geographically beyond Times Square and Midtown -- to Harlem, Coney Island, Flushing, Queens, and downtown Manhattan. Eventually, he hopes to develop electric pedicabs.

They won't be overrunning taxicabs any time soon, but in a decade's time, Bliss predicts there could many more pedicabs in New York -- up to 1,000. "The city can absorb it, and it's not an inconvenience to other industries," he says. For the time being, though, the pedicab business will have its share of bumps in the road.

Orlando Pedicab Hit By Car While Working Downtown

March 1, 2007
ORLANDO, Fla. -- Two women had to go to the hospital after a collision between a pedicab and a car and the driver of the pedicab said it has become more dangerous to maneuver the streets of downtown Orlando. Two women were taken to the hospital when the pedicab they were in collided with a vehicle in downtown Orlando overnight.

Read the article and/or watch the video clip.

My thoughts: Notice that this pedicab was a trailer bike, not a trishaw pedicab like a Main Street or Maximus. The trailer bikes are known to have trouble stopping suddenly in a controlled manner. Would that have made a difference in this incident? Maybe, maybe not. However, when it comes to regulations, safety, and insurance, front and rear brakes should be required. Not all pedicabs are created equal.