How to Start a Pedicab Business
A pedicab business is a small, pedal-driven vehicle operated by a driver. Just as with taxi cabs, customers hire pedicabs to take them to a desired destination; however, pedicabs are better suited for short trips, as the cab's fuel is limited by the strength and endurance of the driver. Pedicab businesses provide a clean, quiet, alternative form of short distance transportation. They help ease traffic congestion during well-attended community events for both tourists and residents.
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Learn how to start your own Pedicab Business and whether it is the right fit for you.

Start a pedicab business by following these 10 steps:
- Plan your Pedicab Business
- Form your Pedicab Business into a Legal Entity
- Register your Pedicab Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Pedicab Business
- Get the Necessary Permits & Licenses for your Pedicab Business
- Get Pedicab Business Insurance
- Define your Pedicab Business Brand
- Create your Pedicab Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your pedicab business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a pedicab business?
A pedicab business can be started with a relatively small investment, whether the pedicab is leased or purchased. A new pedicab costs between $3200 and $4000, depending on the number of additional features. For example, a canopy for rain protection costs about $750, a cargo cache about $80, and lights about $20.00. In addition to accessories for the pedicab, operators require a few as well, such as comfortable clothing and a bike saddle, for optimum performance. A business license, and in some states and cities, insurance, is required.
What are the ongoing expenses for a pedicab business?
Pedicab business owners must maintain their business licenses and meet any state or local requirements for insurance. They must also keep their vehicles safe, clean, and attractive for customers. That requires daily inspections and replacing any worn parts as needed. Tires must be kept properly inflated and seat belts fully functional.
Who is the target market?
Preferred customers include anyone able to pay the fare. Those attending concerts and sporting events are often able to provide ample tips in addition to the regular fare.
How does a pedicab business make money?
Pedicab businesses make money by charging customers a fare for transportation. Many provide tours for residents and tourists. They also make money by contracting with businesses to use their vehicles for advertising goods and services.
How much can you charge customers?
The prices charged for fares vary according to a number of factors, such as the size of the pedicab, the number of passengers the distance of desired destination, and the popularity of a local event. For example, at a sporting event such as the Super Bowl, pedicabs able to switch from street to sidewalk and get to a destination more quickly are in high demand. A ride that would normally cost $30 can command three times as much. Depending on the city and the event, rates can range from $60-$100 per hour. Other prices, such as those of tours, remain relatively constant, with $60 being the average cost of a short sightseeing tour. In larger cities, owners can earn as much as much as $1,200 per month in advertising for each pedicab from other business owners. Some also lease their cabs to the local Chambers of Commerce for both promotional and advertising purposes.
How much profit can a pedicab business make?
The small initial investment makes it possible to begin earning profits almost immediately. Profit margins depend on a number of factors, such as weather, the number of community events, and the size of the local tourist economy. Pedicab businesses located in sunnier regions are less affected by seasonal weather changes and can operate at full capacity year-round.
How can you make your business more profitable?
Some pedicab companies provide designated driver services on weekend nights in areas with a lot of bars and nightclubs. Others create specialized sightseeing tours. Maintaining your own repair shop can reduce maintenance expenses and increase profits. It can also enable you to customize your pedicabs with additional accessories, such as drink holders. Purchasing or renting a trailer to transport your pedicabs to other cities for special events can also be highly profitable. Some owners have reported profits of up to $3000 in a single week working a nationally popular event such as a music festival or sporting event. Smartphone apps such as Clover Go allow drivers to take credit card tips from customers who may be low on cash.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Pedicab Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your pedicab business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate pedicab service. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Release of Liability
To avoid liability and potential lawsuits, XXX businesses should have their clients sign a release of liability. Here is an example of one such form.
Recommended: Rocket Lawyer makes it easy to create a professional release of liability form for your pedicab business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
Recommended: Learn what business insurance for your Pedicab Business will cost.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a pedicab business
Many pedicab business owners promote their businesses by creating and offering specialized tours of their cities. Cultivating personal relationships within the business community can increase advertising revenue. Those relationships can also provide valuable knowledge about new businesses that can be added to tours and upcoming cultural events that will utilize your services. Face-to-face interactions are important in this business, since building a loyal customer base of advertisers as well as passengers is essential for your business to flourish.
How to keep customers coming back
A website is essential for disseminating information about sightseeing tours and areas of operation. Pedicab business owners make their vehicles available at local community events, so advertising at concert venues and sporting events is especially effective. Museums and other popular sightseeing destinations are also good locations to place advertisements for your services.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Pedicab Business in your State
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
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Is this Business Right For You?
This business is ideal for conservationists who want to help reduce carbon emissions. Active people who enjoy working outdoors and interacting with customers are particularly well-suited for it.
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Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a pedicab business?
The daily activities of a pedicab business owner can include:
- Negotiating fares with individual customers
- Bicycle repair and maintenance
- Providing safe transportation to multiple destinations
- Communicating with potential advertisers
- Traveling to other cities for special events
What are some skills and experiences that will help you build a successful pedicab business?
- Bicycle maintenance and repair skills to ensure the safe operation of the vehicle
- A clean driving record, safety training, physical fitness and cycling skills
- Outgoing personality and a sense of humor to successfully compete with other providers working the same events
- Geographic and cultural knowledge of the area to provide tours
- Sales and marketing skills for negotiating fares and selling advertising space
What is the growth potential for a pedicab business?
There are many pedicab businesses so large that the main source of income is renting or leasing vehicles to independent operators.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
- Funding
- Events
- Guides
- Support
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
How and when to build a team
If you find that you are turning away business, it may be time to purchase another pedicab and expand. When leasing a pedicab, it’s important to make sure operators are at least 21 years of age and have good driving records and adequate safety training. Most pedicab fleet managers provide training programs for new drivers.
Next Steps
Get more ideas with our Business Ideas Generator.
Check out our How to Start a Business page.
Sign up at the Business Center to access useful tools for your business.
Useful Links
Industry Opportunities
Real World Examples
- Central Park Pedicab Tours
- New York Pedicab Services
- Outline of the business including a semi-profile of a pedicab business owner