by Julie Tisdale
City & County Policy Analyst
Maybe I’m the only one, but I somehow missed the story of the tourist family from Texas who were charged $442 for a pedicab ride around New York City over the summer. Evidently, the case sparked outrage, and understandably so. $442 for Dad, Mom, and two daughters young daughters to be pedaled around for 14 blocks? Really?!
Now, as a response, the city council is considering new regulations to change the charge structure so that all pedicabs would charge in the same way. The leading proposal seems to be for a flat, per minute fee, but there are other options that are preferred by some interested parties. No final decisions have yet been made.
The stated goal of the City Council in considering these changes is to make the charge structure more clear for tourists and to prevent the $442 scenario from happening again. After all, it hurt the reputation of all pedicab drivers and made tourists less trustful of the whole system. One pedicab driver talked to Fox News about it.
“It was not good for us,” Souleymane Toure said as he hawked riders for his pedicab in Central Park. “Because any time you stop somebody for the ride they say, `Are you going to charge us $400?”‘
But it seems to me that Mr Toure perfectly illustrates precisely why NYC doesn’t need a new system. Currently, pedicab drivers can charge whatever they want and calculate that charge in pretty much any way they want – per minute, per person, per mile or block. They can agree a flat fee upfront or calculate as they go. There are lots of options. That creates opportunity for the kind of ridiculous charge that the Texas family encountered over the summer.
But it also gives consumers a lot of power. Tourists have heard about the $442 pedicab ride and, since then, they’ve been asking more questions about prices. Since they know things could get expensive, they’re more likely to make sure they really understand the pricing structures before they get into pedicabs. Additionally, since pricing structures are different, consumers can shop around until they find one they like. If one driver wants to charge by the mile, and another offers a flat fee, tourists can decide which seems the better option in their particular circumstances. It’s very unlikely that another family is going to be charged such exorbitant rates for a pedicab because word about the $442 ride got out.
This is how the market takes care of these situations without any need for government regulation. In the real world, reputation matters and individuals communicate. Businesses, including pedicabs, can’t rip off their customers very often before word gets out and those businesses start to feel the consequences. One bad pedicab driver took advantage of out-of-town tourists this summer, but thousands of other tourists heard about it and are asking the questions they need to ask in order to keep themselves from being similarly abused. It’s organic consumer protection, it’s quick and effective, and it requires no government intervention. Sounds better than a big bureaucratic system to me!