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.

Learn how to start your own Pedicab Business and whether it is the right fit for you.


Start a pedicab business by following these 9 steps:

You have found the perfect business idea, and now you are ready to take the next step. 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.

Check out our How to Start a Business page.

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:

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.

Find a Domain Now

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After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

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

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire a Business Formation Service 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!

A cube with LLC printed on its sides

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?.

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

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

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.

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:

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.

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.

Business Insurance for
Pedicab Business

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.

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.

STEP 9: Establish your Web Presence

A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Start A Pedicab Business In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

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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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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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.

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe below to view later.

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.

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.

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