Apr 19th 2007 | DENVER, LONDON AND NEW YORK
From The Economist print edition

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.

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