Months after new regulations imposed, pedicabs struggle - Liberty Justice Center

Months after new regulations imposed, pedicabs struggle

Four months ago, Chicago passed an ordinance regulating the city’s burgeoning pedicab industry. What’s been the effect so far?

By many accounts, business has taken a major hit. Before the ordinance, it was estimated that Chicago had as many as 400 pedicabs operating throughout the city. But since the ordinance took effect, the city has received just 80 applications and issued 15 pedicab licenses as of last Friday, according to the Chicago Sun-Times.

It’s likely that some of the operators have yet to apply for a license. But part of the explanation is that many pedicab operators have simply quit. T.C. O’Rourke of the Chicago Pedicab Association has noted that many operators “are unwilling to take on that expense and … risk” of doing business in Chicago’s unfriendly regulatory environment. According to Robert Tipton, owner of Chicago Rickshaw, between 40 and 50 operators would rent out his pedicabs over the summer in past years. But that number has dropped to five this summer, leading him to fear his company will go out of business.

Potential pedicabbers now face substantial barriers to entry. The most problematic aspects of the ordinance include:

  • A ban on pedicabs on State Street and Michigan Avenue downtown, in River North at all times and in all parts of the Loop during rush hour
  • A mandate that pedicab operators have a drivers licence for at least one year before being allowed to work
  • A cap on the number of pedicabs that can legally operate in the city at 200

City Council passed these rules in the name of public safety, but did so without bothering to conduct or commission any study on how pedicabs affect traffic or safety. The city merely asserted that pedicabs posed a problem that a geographic ban, one-year waiting period, operating cap and annual fee were somehow needed to fix. And it ignored certain relevant facts – for instance, that pedicabs fit within the five-foot minimum width of Chicago bike lanes, undermining any argument that they obstruct traffic more than anything else permitted on the road. There was surprisingly little weighing of rudimentary arguments or facts at the April City Council hearing approving the current rules. For instance, pro-regulation advocates claimed pedicabs “exceed the speed limit,” a clearly impossible feat, without facing any pushback or questioning from aldermen.

Alderman Tom Tunney of the 14th Ward, who drafted and was the main sponsor of the ordinance, publicly admits that the cap on pedicab licenses at 200 was “arbitrary,” as if whims were an appropriate basis for legislation.

It’s no surprise, then, that the city’s haphazard “regulate first, think later” approach is discouraging would-be entrepreneurs from providing this green transportation option to consumers.

Of course, no form of transportation will have a perfect safety record. Pedicab operators have accepted regulations that actually relate to protecting public safety, such as insurance requirements and rules that enforce adherence to basic traffic laws. But to single them out for prohibitive rules is unfair and irrational. Chicagoans are well aware of the various dangers of driving and cycling, and the city actively encourages, at taxpayers’ expense, the use of bikes on city streets.

The city needs to update its rules to better protect the economic freedom of pedicab operators and their patrons. Studies are imperfect, but they at least provide a more objective starting point for crafting rules than aldermen focused on crafting the appearance of legislative productivity.

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