SPEAKER: Steve Meyer – Founder and CEO Mainstreet Pedicab
DATE: August 20 & 22, 2007
TOPIC: Peddling Your Way to Success – The Mainstreet Pedicab Story

Pedicabs are human-powered taxis seen in many of the major cities around the world. They work well for not only transporting people, but also for the delivery of food and merchandise.

In a world that is becoming overwhelmed with too many cars, pedicabs offer a green and sometimes romantic alternative. While they work best over short distances ranging from 2 to 10 blocks, they are fully capable of traversing much greater distances.

Steve Meyer didn’t invent the pedicab, but he is in the process of perfecting the marketplace for it. With multiple income streams and a loyal following, the pedicab industry is breaking into new territory.

Here is what it took for Steve Meyer to become one of the leading figures in the pedicab industry, and how Donald Trump had a hand in his success.

Speaker: Steve Meyer is the Founder and CEO of Mainstreet Pedicab in Broomfield and has worked most of his professional life self-employed, interspersed with periods of employment.

He attended the University of Colorado from 1972 trough 1979 getting both a BA in Environmental Biology and an MA in Economics. He spent more than a year of this time traveling in S. America, Asia, Europe and Africa.

For many years, Meyer worked in the real estate industry doing economic and market research for real estate developers. His interest in the redevelopment of downtown areas and his experiences in Asia were key factors in his development of Main Street Pedicabs. Main Street was founded in 1992 and is the largest manufacturer of this type of vehicle in N. America.

Regulation threatens a booming business with, er, a cyclical downturn

AP

A PEDICAB borrowed from a friend for a conference on pedestrianisation in 1990 got Steve Meyer pedalling what is now a fast-moving business. Hoping to liven up the often-deserted streets of downtown Denver, his hometown, he bought two of the bicycle taxis. But they did not work very well, so he started building what has since become the industry standard, with 21 gears, hydraulic brakes and so on. His firm, Main Street Pedicabs, now caters to rising demand both in America and abroad.

Alas, regulation in two of the biggest markets for pedicabs threatens to puncture Mr Meyer’s upbeat mood. Last month New York’s city council voted to impose onerous rules on the hitherto unregulated pedicab industry and to limit the number of pedicabs to 325. A protest prompted Michael Bloomberg, New York’s mayor, to veto the new rules, apparently out of entrepreneurial fellow feeling for the pedicab drivers, but the city council is likely to override his veto, perhaps as soon as next week.

Pedicabs first started operating in New York in the mid-1990s, but their numbers soared from around 100 to over 500 after they featured in an episode of Donald Trump’s business reality-television contest, “The Apprentice”, in 2004. For the sort of fit youngster who wants a flexible job—many drivers in New York are actors or students—it pays well: $300 on a good day, though typically half that. The cost of entry is low, perhaps $4,500, compared with $400,000 for a yellow-taxi medallion.

Pedicabs are under attack in London, too, where an estimated 400 operate. Transport for London, a regulatory body, is reviving its controversial claim that pedicabs should be regulated as “hackney carriages”, like the city’s black cabs. Chris Smallwood, chairman of the London Pedicab Operators Association and boss of Bugbugs, a 60-strong pedicab firm, says treating pedicabs like black cabs would impose unbearable costs on the industry. He has helped to draft an amendment to a bill now before the House of Lords that would introduce lighter pedicab regulations.

There is striking agreement between the pedicab trade groups in both London and New York that some sort of regulation is needed, not least to deter rogue operators. But current proposals seem to serve the interests of motor-taxi drivers, who want their rivals off the road.

The irritation is that pedicabs do not compete much with motor-taxis, say Messrs Meyer and Smallwood. Pedicab journeys tend to be the short trips that drivers of gas-guzzling taxis hate most. Pedicabs’ main competition is walking, says Mr Meyer, who points out that if New York’s 12,000 yellow cabs were replaced with pedicabs, “there would be a lot less congestion”. Here’s hoping that politicians on both sides of the Atlantic cast their votes for pedal power.

Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.

In the old fishing villages on the southeast coast of Spain, the streets are narrow, the parking is atrocious and the tourists are plentiful.

But for tourists who are too tired and sweaty to take another step under the hot Spanish sun, there is relief, thanks to a little Broomfield company that is bridging the walker-automobile transportation gap with something called a “pedicab.”

On a recent morning in March, a dozen or so yellow pedicabs lay ready for shipment to Spain in the small warehouse of Main Street Pedicabs Inc., a company that has championed pedicabs for more than a decade under the leadership of its owner and CEO, Steve Meyer. “We’re not only building pedicabs, we’re building a pedicab industry,” Meyer said.

Meyer said he stuck with pedicabs while others might have given up because he and his wife, Ruth Vanderkooi, simply love the business. And that’s even though they make less than they would if they were fully employed somewhere else, he said.

Meyer has a background in urban planning, and sees himself as sort of a champion of an alternative form of transportation that can add excitement and utility to boring cities dominated by automobiles.

So, thanks in part to supplemental income earned by his wife and to real estate development projects on the side, Meyer has persevered in the pedicab business and figures he’s easily the biggest pedicab manufacturer in the United States.

That may seem a strange claim for a business that has only two full-time employees and another 10 people or so that it uses on a part-time basis. But Meyer said he outsources most of the production and does only the assembly in-house. For instance, he uses a machine shop in Broomfield, a fiberglass company in Greeley, a tube-cutting company in Golden and a welder in Denver.

Pedicabs are three-wheeled vehicles that are similar to the Asian rickshaw, with a pedaler up front and a seat that can hold two adults in back. Main Street’s pedicabs have a base price of $3,400 and a fiberglass cab, 21-speed drivetrain and differential that allows the driver to turn on a dime.

Main Street sells them to operating pedicab businesses, a few of which it partly owns, including two companies with 20 pedicabs apiece in New York and Denver.

Main Street has produced about 500 pedicabs since its inception, and its production volume has been flat in the last four years, but Meyer sees a new day dawning for the business, and here’s why:

* The weaker dollar has made his price competitive in Europe, and he believes he has the best product. By 2005, he foresees half of his business coming from Europe.
* He is looking at setting up distributorships in New Jersey, the Southeast United States and Spain, which would increase the efficiency of his manufacturing operation.
* He is pushing the marketing of a cargo-hauling tricycle with a 24-volt battery system to supplement the pedaler’s power. He sees that being used in amusement parks, college campuses and business campuses. (He also has an Pedal-Electric Pedicab, which was the type ordered from Spain.)
* Manhattan Rickshaw Co., the New York operating company in which Meyer has a half-interest, was featured March 11 on “The Apprentice,” the television show featuring Donald Trump. Teams in the show competed against each other by operating pedicab services, and Meyer sees the exposure as another step forward in getting pedicabs accepted as mainstream transportation.

Revenue from ads, drivers

Pedicab operators make money partly from leasing their pedicabs to drivers and partly from advertising on the pedicabs.

Lease rates to drivers can depend on the location and event. For instance, in a Las Vegas mall, drivers lease pedicabs from the operator for $20 a shift and don’t charge their riders; they make money solely on tips.

At the Super Bowl in Houston, pedicab operators were charging drivers $100 per shift.

In Denver, the driver pays up to $50 for an eight-hour shift, and is restricted by the Denver operating company to charging the riding customers no more than $2 per block. The city licenses both the driver and operator.

Advertising also can provide important revenue. Indeed, in the Denver operating company that Meyer half owns, roughly half the revenue comes from advertising, and about half comes from leasing the pedicabs to drivers. Bud Light has signed up for advertising four straight years in Denver.

Jason Longsdorf, a planner with the city of Denver, said the pedicabs are a “great option” and “a good civic feature.”

“They filled a very small niche that’s grown with the LoDo and baseball crowd,” he said.

And Longsdorf foresees more growth opportunity for the pedicabs in Denver as hotel density increases downtown and the convention center expands.

Longsdorf said the licensing is necessary to ensure a certain level of safety, and Meyer likes the idea of minimum standards to maintain the industry’s image.

He’s getting calls from cities that are interested in revitalizing downtowns, and he’s seeing pedicabs move from novelty-item status into a practical alternative for people who can’t walk, or don’t want to walk, a number of blocks.

“Now, I think they’re going to become part of the transportation fabric,” Meyer said.