Pedicab Drivers in Austin are a hard working group of men and women. We literally work our asses off. As far as I can tell none of us are getting rich. While many are doing well enough to get by just pedicabbing 3 or 4 nights a week, there is one sure fire way to do better - going independent.
Riding independently in Austin is not a hard thing to do. By my count, approximately 13 of the 100 or so riders in town are Indy. Most “Indentured” riders, renting equipment from pedicab companies are, paying between 20% and 40% of their earnings for the privilege. In my opinion, if you are making enough as a pedicab driver to improve your quality of life, and you enjoy the work, you have nothing to lose by “Going Indy.”
From several conversations I have had with City of Austin employees, here are the basic requirements for starting a pedicab company as I understand them:
- A business name registered with the state. Also known as a “DBA” or Doing business as.
- An general liability insurance policy that will cover you passengers against injury, property damage, or other mishap for up to $300,000.
- A federal tax identification number issued by the IRS. (This may be optional.)
- A pedicab that will pass their inspection. It may be a Trike or a Trailer type cab.
When it comes to starting a pedicab business, reinventing the wheel is not necessary. When considering how to go Indy one can simply copy the successful small companies that are currently operating. Consider Roadkill, Metrocycle, Dikes on Bikes, and Triciclo. None of these companies has more than 8 cabs. All have been operating for several years.
Here is a simple recipe:
- Get together with a few other pedicabbers that you trust. (Or go it alone if you prefer.)
- Pick a name for your new company. Go to the county clerks office and register your name as a DBA.
- Call a few local insurance companies and ask for a few quotes. Pick a policy that has the coverage that you want at a price that you like. (Do you want insurance to cover you bike against theft or fire as well as the liability coverage for your passengers that the city requires? Do you want coverage that will pay for your doctor bills if you are injured on the job?)
- Contact the City of Austin Public works and Transportation Department. Tell them of your intention and meet with them to go over your paper work. They will make sure that you have met all the requirements. They will issue an “Operating Authority” when all of their requirements are met.
- Get you bikes inspected and registered.
- Hit the streets as an independent business person keeping all of the money that you earn. You just got a raise!!
Another business decision that you and your pedicab collective might want to look into is forming a limited liability corporation, (LLC) or some other legal entity to shield any one person from total responsibility from acts concerning your business. Further, you might want to get some business training from Big Tree Pedicab Management or from the City of Austin Small Business Development Program.
The cost of going Indy has scared many people away. The biggest initial expense is going to be the purchase of your pedicab. While there are ways to get cabs cheaper, the most obvious method is to buy a new one from Mainstreet, Fuse imports, or Cycles Maximus, Pedaltek.
Mainstreets start at $2900 and go to $3700 before adding any accessories. Fuse imports is charging $2800 for a pedicab with a lights, canopy and rain cover. Pedalteks start at $1995 as a bare trailer type pedicab. A canopy will add between $300 and $500, and space for an advertisement will add between $175 and $300 dollars. Pedalteks of course require that you have your own bike to pull the cab. A new mountain bike sturdy enough to pull a trailer will likely cost $400 to $1000 or more from a bike shop. From what I can tell off of the distributor’s website (Revolution Rickshaw) they are selling the Cycles Maximus with pedicab body for $5645, (plus $165 for a rain cover, if wanted.)
Pedicabs are large items and will not be cheap to ship. Ask the seller about the cheapest way to have it delivered.
Insurance expenses are a bit more nebulous. It may not always be true that you get what you pay for, but the more coverage you get, the more you will have to pay from any given company. Minimum liability coverage will cost less than a policy that covers theft, damage from flood or fire, and pays for an injured pedicab drivers doctor’s bills. From talking to several independent riders that have grouped together to purchase a policy that covers them all, the costs have ranged from $150 and $450 dollars per year, per rider. Again, the type of coverage provided may be quite different for each of these policies.
The process of getting a DBA in Texas is spelled out here. It costs about $14.00.
Getting a Federal tax ID number, also know as an Employee Identification Number is spelled out here. It is free. You can even apply online.
Renting a space to store your pedicab may be necessary, and will add to your operating cost. Storage units near downtown are available. While they may not have the most convenient location they seem to be the cheapest option. Renting commercial space east of downtown is being done by a few companies. Eastside locations tend to be more convenient but also more costly. I have heard from pedicabbers paying between $30 and 60$ per month each to rent a space that is shared with other pedicabbers for storage.
If you happen to live close enough to downtown to ride your pedicab from your home, and have some storage space, you can of course save money on this expense by keeping you cab at your home. Another option for storing your pedicab(s) is using a van, enclosed trailer, shipping container, old tractor trailer, or a school bus parked in a secure location.
So here is a rough break down on the total per person cost for the first year of operation assuming that a new pedicab is purchased and you go for a fairly expensive insurance policy and storage:
- Fuse imports pedicab ~ $2800
- Insurance ~ $400 per year
- DBA (can be divided with other riders) ~ $14
- Storage at $50 a month ~ $600 per year
- Pedicab registration - $50 per quarter or $200 per year
- Bike repairs. ~ $200 per year
This totals up to $4214.
When considering that pedicab companies are charging between $30 and $50 dollars on a normal night to rent a pedicab (average of $40), it will take approximately 105 nights to break even over the cost of renting the cab during your first year. Of course then your cab is then paid for. You own it. If you tire of being a pedicab driver, you can sell your cab or rent it to another driver.
In your second year of operation, if all your other expenses remain the same, you will break even on operating costs in approximately 31 nights as compared to renting. After these 105 or 35 nights of riding in your first and second year you are “riding for free”. Ain’t it grand to own the tools of your trade.
The above figures do not take in to account the much higher rates that are generally charged during special events. (Football games ~$65, SXSW ~$60/day, ROT Rally, ~$50/day, ACL ~$70/day, New Years Eve ~$70, Halloween ~$60, etc) It also does not take into account a natural tendency of larger pedicab companies to charge more to their riders when demand for cabs is greater than their supply of cabs.
Other perks of being independent include additional revenue or barter of goods and services available from advertisers (think massage therapists, etc.), being able to charge a fixed rate to customers instead of operating on the “Just Tips” policy that most companies employ, and being able to decorate you pedicab to your hearts content, etc.
While most Austin Indy riders have a year or more experience under their belts, and thus have learned how to better maximize their income, most have reported earning significantly more than “Indentured” riders report earning.
Just ask a local Indy rider how much he or she makes. Talk to the big guy on the giant green trike. It might surprise you.
