31 May 2007 Free Transportation Service Shut Down by Government

The Santa Barbara City Council drove pedicab operators out of business by requiring that they get a driver’s license, undergo a criminal background check, obtain a business license and carry insurance.

City Council Shuts Down Free Transportation Service

Imagine a free public service that relieves the aching feet of tourists, gives kids a safe ride home from the movies at night or keeps someone who might have had one too many drinks at the local pub off the roads — and is environmentally-friendly, too. Then imagine government regulations shutting the service down.

It happened in Santa Barbara, California.

Pedicabs – bicycle rickshaws able to carry up to six people per trip – were becoming increasingly popular in Santa Barbara. The young men who peddled people around town maintained an informal business, didn’t keep regular hours and did not charge a fare for rides. While they accepted tips, drivers did not demand them. The Santa Barbara City Council effectively put them out of business, however, by passing a law in December of 2002 that required pedicabbers to jump through expensive bureaucratic hoops. These requirements included getting a driver’s license, undergoing an FBI criminal background check and obtaining a business license and proof of insurance. All of this was to be paid for by the pedicabber. Insurance alone can cost more than $1,000.

Thanks to these imposed costs, pedicabbers were unable to continue operations. Most of Santa Barbara’s pedicabbers are now out of business.

Sources: ABC News (August 28, 2003; August 29, 2003), Commuter Bicycles

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Labels: Business, Regulation, Regulatory Victims