down N. Mississippi Avenue.
Back in April I shared the news that a 16-person party-bike dubbed the “Pedalounge” was all set to hit the streets of Portland. Well, it turns out that the business is on hold due a City permitting issue related to liability insurance.
Portland Pedalounge owner John Boblett is frustrated because he cannot get insurance due to what he feels is a problem with the City of Portland’s permit requirements. The City says it’s just protecting taxpayers from liability if anything goes wrong.
Boblett aired his grievances via testimony to City Council yesterday. “I envision my Pedalounge as becoming one of Portland’s Signature Attractions; on the short list of must-things to do here in this City,” Boblett shared.
“If the insurance industry itself classifies this as a high risk activity that’s even more reason to have these requirements in place.”
— Kathleen Butler, City of Portland Revenue Bureau
Boblett says he’s been working hard to obtain a business permit but is no at an “impasse” over an issue known in technical terms as the “additional insured endorsement.”
In short, the City of Portland requires that all for-profit business operating in the public right-of-way have insurance that puts all liability for accidents on the business owner. Boblett says his carrier has declined to issue him insurance specifically because his agent feels the City’s language is too broad. According to Boblett’s agent, the language includes a stipulation that Boblett would be liable in an accident even if failing City infrastructure was the cause.
“My insurer does not believe it is in their best interest, or fair and equitable, to be held liable for an incident that is determined to be caused by a defect in Portland’s infrastructure,” reads Boblett’s statement to City Council.
As an example, Boblett shared this scenario:
During a Tour with a group – we hit a pothole. A guest falls from the bike and is injured. Portland says I should have avoided that pothole. The insurer says they will not be held liable for the City not maintaining its streets.
Boblett says his insurer covers 18 similar businesses throughout the country, but they can’t get a permit from Portland.
City of Portland Revenue Bureau Regulatory Division Manager Kathleen Butler tells me they’re just looking out for taxpayers and that there must be some confusion with the permit requirements. “There’s no specific language about potholes or infrastructure in our permit requirements. It’s all standard language” she told me via telephone today. (City Code 16.40.410 “LPT [Limited Passenger Transportation] and Taxi Insurance Requirements” makes no mention of infrastructure upkeep.)
Butler confirmed that they’ve gotten three requests for party-bike operator permits recently. Because of this interest and the fact that the vehicles are new to Portland, the Revenue Bureau has assembled a working group with representatives from the Police Bureau and Liquor Control to learn more about them. Butler said she also has insurance experts on her staff who are looking into the problem.
Butler herself says she would be happy to issue the permit if Boblett could get insured. Curious as to why he was having trouble getting a policy, Butler called a insurance agent who covers some local pedicab operators. “I asked if they covered these pedal lounges, and they said, ‘no’.” When Butler asked why, the company said they consider the party bikes “too much of a risk” because the seats have no backs on them and the passengers aren’t secured. In addition, the operators either serve alcohol or do bar tours — both of which they say increases the risk of someone falling off the vehicle.
“If the insurance industry itself classifies this as a high risk activity that’s even more reason to have these requirements in place,” says Butler.
[Note: The person operating the Pedalounge does not drink and is solely responsible for the steering.]
What about the successful party bike operating in Bend? “Bend is much smaller place,” Butler explains, “These vehicles in Portland will be running in traffic that will be intense at times.”
She added that her staff is doing research on how larger cities are dealing with these types of vehicles.
In the mean time, Boblett will just have to wait until either he can find insurance coverage that meets the City’s permit requirements, or the City changes their requirements (not likely to happen).
Boblett says 18 other cities across America already have party-bikes like his in operation and “It would be a shame if Portland was absent from that group.”