UPDATED: Proposed Law to Limit Pedicabs; Ordinance Threatens Industry, Operators Say

A proposed ordinance under consideration by Chicago City Council transportation and licensing committees threatens the city’s nascent pedicab industry, pedicab operators and owners say. The proposal would restrict pedicabs to designated routes, largely ban them from the city center, limit advertising on the vehicles and require the pedicab owners to provide workers’ compensation insurance for operators, according to the owners.

“It’s a growing industry that needs regulation,” said Efrat Stein, spokeswoman for Business Affairs and Consumer Protection Commissioner Norma Reyes. Stein said the ordinance would protect consumers and pedicab operators and owners.

Rob Tipton, the owner of Chicago Rickshaw LLC, owns 30 pedicabs in New York City and 20 in Chicago. He said the industry in New York fought against regulation, successfully negotiating an ordinance it could survive under.

But it is a different story in Chicago, where the industry is fragmented, he said. Tipton explained that the law would require him to provide workers’ compensation insurance to each of his operators. The operators, he said, are leasing the pedicabs from Chicago Rickshaw and other companies. “They are independent operators,” he said.

“It isn’t like a cab,” he explained. Rickshaw drivers are at the whim of the weather, the seasons and generally do not operate late at night or early in the morning. However, insurance companies are rating the operators like taxi cab drivers.

That insurance rating is too expensive, he said.

“We don’t want to put anyone out of business,” Bennett Lawson, Deputy Alderman to 44^th Ward Alderman Tom Tunney said. Lawson said the Pedicabs are offering a unique service to the ward and the city. But he noted that the vehicles are operating with passengers on city streets. The barriers to entry currently are very low, an owner-operator only needing a pedicab. For example, there are no requirements for lighting or safety inspections of the pedicabs he noted.

“We’re working to find an ordinance that works,” Lawson said. “There are very few businesses that operate without any regulation.” Lawson said the requirement for insurance coverage was created by the state. “We’re trying to work with the state and the industry” to find an accommodation Lawson said.

Tipton explained the peculiarities of the industry. His company leases the bikes to individual operators for a flat rate. The operators then cruise areas popular with tourists and others offering rides.

The rides are usually point-to-point service, not for sightseeing. Think of the difference between taking a taxi and taking a horse and carriage ride, according to Tipton. For example, around Wrigley Field, a passenger might ask for a ride to their car after the game.

Tipton said the proposal would restrict the use of the pedicabs from popular tourist sites such as Michigan Avenue and from hotels serving the central business district. “I just received a request to provide 20 pedicabs for a group staying at the Fairmont,” he said. Under the proposal, he’d have to turn that business down he said.

Operators do not post rates, operating under a verbal agreement with passengers. Among the provisions of the ordinance, rates would be posted and each vehicle would receive a city license.

Lawson indicated there may be a misunderstanding as the proposed ordinance would create prohibited areas, not prescribed routes. Lawson hoped to negotiate a pilot program that could serve to pinpoint issues. “We want to see where we have problems,” Lawson said, “before legislating prohibitions.”

“This is unique in that you have many independent operators and owners,” Lawson said. Lawson said Tunney wanted an ordinance that would continue to allow very low barriers to entry for both operators and owners. Noting that Tunney too is an independent business owner, Lawson said Tunney supports moves that encourage economic development and entrepreneurial activity.

Yoni Downs, 24, of Ukrainian Village and John Hawkins, 30, of Lakeview, have been operating pedicabs for several years. It is physical work, they said; with some pedicabs holding three to six passengers and the heavy structure of the pedicab frame, the combined weight could exceed 2,000 pounds.

They said they sometimes offer free rides, depending on the tips from the fun enjoyed by the passenger for their compensation.

“Call your alderman,” they said. “Stop this ordinance.”

Messages were left for Ald. Brendan Reilly (42nd). Ald. Reilly was unable to reply within the deadline of the submission.