PedalPub Loses Its Battle with the City

By Nicole Coleman

Posted: Monday, Dec. 16, 2013

PedalPub Chicago’s  attempt to land a business license in the city was rejected for the third consecutive year in mid-October by the Department of Business Affairs and Consumer Protection. An appeal attempt was unsuccessful, and now owners have turned to their alderman for help.

“We’ve applied for two different licenses multiple times and the city wants to make the hurdle higher than should be,” said PedalPub manager Matt Graham. “Chicago has decided to make it difficult for most new businesses that don’t fit the cookie-cutter. They’re reticent to change. We’ve gone to 30 cities and they’ve all been able to license it. They’ve all embraced it. Chicago is the only exception to that rule.”

Graham brought the 16-passenger bar tour bike business from Minneapolis to Chicago in 2011 because he said he wanted to bring fun to the Windy City.

“We’ve been operating for seven years all over the United States,” he said.  “We had plenty of people from Chicago taking our tours in Minneapolis. So we thought it would be a good place to bring it. There have been people from Chicago who have told me that this is the coolest thing that they’ve ever seen.”

PedalPub operations ceased Oct. 29 after Graham received notices warning him of criminal charges the Department of Business Affairs and Consumer Protection could file against him if he continued to operate a Charter/Sightseeing Vehicle without a license.

Although business affairs officials declined to comment for this story, the department maintains that it has been working with PedalPub to help it get the proper license. A media relations representative stated in an email that PedalPub must meet the requirements under the Municipal Code of Chicago, which includes Federal Motor Vehicle Safety Standards for vehicles of its size, type, and proposed use.

Graham's appeal didn't get far. On Dec. 3, the Department of Business Affairs and Consumer Protection denied Graham a license, which has resulted in the removal of PedalPub bikes from Trinity Bar's garage to a storage unit outside Chicago.

“We’ve pulled the bikes out of the city,” Graham said. “Our only hope right now is working with Alderman Michelle Smith of the 43rd Ward. She is on board with us wants to help us work things out.”

Graham and his partners are currently seeking pro bono representation because although the company has not exhausted all of its resources, Graham has spent thousands of dollars in consultation fees since 2011. As Graham approaches his relocation deadline, PedalPub will continue its fight to be licensed through August 2014.

“I don’t expect anything to happen in the short-term," Graham said. “The reality is that nothing will get done unless the laws change and that takes time. If I could be licensed temporarily with the possibility of getting a permanent one, that would be fine. But unless that happens, I will be leaving Chicago.”

Since its launch in Chicago, the company has conducted more than 400 pedal-powered bar tours that transport customers to bars along neighborhood routes. Guests book specific routes for a group of six to 10 people. The price ranges from $160 to $190. Graham said licensing issues began in early February 2011 when the company applied for a limited business license.

“We knew that would be the right one for us,” Graham said. “We were denied and told by the Department of Business Affairs that we needed a Charter/Sightseeing Vehicle license because PedalPub carries up to 16 people.”

According to Municipal Code 9-112-010, a Charter/Sightseeing Vehicle must be a Public Passenger Vehicle for hire principally on sightseeing tours or charter trips. By definition, a Public Passenger Vehicle refers to any motor vehicle that is subjected to Illinois State Vehicle Code Inspection. Illinois State Vehicle Code Section 1-146 states that a motor vehicle is “every vehicle that is self-propelled and propelled by electric power obtained from overhead trolley wires, but not operated upon rails, except for vehicles moved solely by human power.”

The Department of Business Affairs and Consumer Protection declared that although PedalPub meets the standards of having a manufacturer’s rated capacity of ten or more persons, it cannot be a motor vehicle because it is operated solely by human power. Graham posted sections of both Codes to the PedalPub Facebook Page.

“They have requirements for businesses that no other city in the country requires," Graham said. ”They want me to put a motor on it. That defeats the purpose of it being bicycle-powered and green. I will never do that.”

Transforming PedalPub into a motorized vehicle was not the only issue that caused licensing conflicts.

“They found ways to keep denying me, Graham said. “At one point, I was told that I would have to install windshields, seatbelts, seatbacks and a four-wheel braking system for safety, which is ridiculous. We don’t even go 5 mph. All that stuff is not going to make it safer.”

On the PedalPub website, Graham issued a statement under the logo saying, “PEDALPUB CHICAGO IS CLOSED!  PedalPub Chicago has been closed by order of the Chicago Department of Business Affairs and Consumer Protection.”

Attempting to garner support, Graham created a social media campaign urging people to sign the Save PedalPub Petition. Currently, the campaign has yielded 298 signatures.

“We started the campaign because we have exhausted all our options, he said. I have spent $50,000 in legal representation.”

Graham said that Chicago is forcing him to relocate. He had previously considered moving the company to Evanston, but is unsure as to whether people will come to Evanston for the tours.

“People don’t want to go to the suburbs for tours. They want to be in Chicago,” he said.

Mike Bomher, general manager at Trinity Bar on North Halsted Street, said PedalPub has been great for the bar.

Bomher partners with PedalPub by allowing Graham to rent Trinity’s garage as a storage unit for the tour bikes and equipment.

“If they move, I will be disappointed,” Bomher said. “Not only do they rent out space in our garage, but they start and end each Pedal Pub there. So we will lose all that business. We’ve had some slow weekdays and PedalPub made our day.”

Graham said that PedalPub wants to support local bars that are underserved.

“During our pub crawls, we want to go to neighborhood bars with character,” he said. “Those are our kind of bars. Those are the bars we want to support.”

“On Saturdays, they might have 8-10 Pedal Pubs,” Bomher said. “They may have ten per Pub and they all buy at least one beer. If we lose that, we’ll lose 500 bucks toward that income.”

Graham attended an appeals hearing on Nov. 5. He is waiting for what he calls the “final blow” Dec. 3.

The Department of Business Affairs and Consumer Protection has agreed to establish a checklist of Federal Motor Vehicle Safety Standards  that are appropriate for PedalPub. If the company meets the standards, which will not include it being a motorized vehicle, the business affairs department will license PedalPub as a Charter/Sightseeing Vehicle.

“I’m going to have a success with this,” he said. “If Chicago doesn’t want it, there are tons of other cities that will have it in the next year or two when we decide to pull the plug on not just Chicago, but the state of Illinois.”

pedal pub and people Pub Crawlers on tour (Photo/Chicago PedalPub Facebook Page)

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