PedalPub investment

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eltron
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PedalPub investment

Post by eltron » Sat Mar 10, 2018 7:20 pm

I've got a friend of mine that contacted me about investing in a PedalPub/Party bike... whatever you want to call it. He has plans to start in his city and move up and down the coast to different cities.

He's gone to classes for this stuff (didn't even know they existed) for the past 6 months. Has sold it as a great way for passive income.

My question is, has anyone been involved with, or know anyone that's been successful with this type of investment?

Solid investment for passive income, or a fad experience?

I have two worries:
1. It's a fad investment and I end up barely making my money back, or worse, losing money that could've been invested say, in the market.
2. It ends up being a solid investment that I stay away from out of fear, my buddy ends up a millionaire because of this dumb pedal pub and I have to sit back and watch it happen and only blame myself for staying on the sidelines.

Anyways, I'm looking for some unbiased opinions on this.

Thanks.

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TomatoTomahto
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Re: PedalPub investment

Post by TomatoTomahto » Sat Mar 10, 2018 7:26 pm

I don’t know anything about the pedal-whatevers, but I do know that worry #2, the Fear of Missing Out (FOMO), has led otherwise sane people to do some crazy things.

livesoft
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Re: PedalPub investment

Post by livesoft » Sat Mar 10, 2018 7:34 pm

I think it won't take off and people will lose money with it.

First, it seems totally depending on the weather. Suppose one has a trolley booked for bachelor party, birthday, whatever, and that day a cold front, thunderstorms, or hurricane rolls through. One would have to refund the money or reschedule or ....

Second, think of all the permits needed. Third, the maintenance needed. Fourth, look at the tourist places with the horsedrawn or bicycle carriages.

Anyways, I think of tons of reasons that these things will not really make a lot of money and will be a headache for anybody who gets into them.
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climber2020
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Re: PedalPub investment

Post by climber2020 » Sat Mar 10, 2018 7:45 pm

1) All the touristy cities already have these

2) If you've never tried one, try one as a passenger

3) I've tried one, and it'll be the only time. Pedaling one of those things is a lot harder than it looks. I'm in pretty good shape, but it's strenuous work, and after about the fourth beer I was ready to get off the contraption and go sit at a bar to drink like a normal person.

magicman
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Re: PedalPub investment

Post by magicman » Sat Mar 10, 2018 7:59 pm

I'd keep investing in index funds and skip the pedal pub investment. I think its more of a fad experience rather than a good investment.

chw
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Re: PedalPub investment

Post by chw » Sat Mar 10, 2018 8:01 pm

Just saw one yesterday in Savannah. Looked like the pedalers were having a grand time. I would stick with index investing though... :sharebeer

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F150HD
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Re: PedalPub investment

Post by F150HD » Sat Mar 10, 2018 9:20 pm

eltron wrote:
Sat Mar 10, 2018 7:20 pm
I've got a friend of mine that contacted me about investing in a PedalPub/Party bike... whatever you want to call it. He has plans to start in his city and move up and down the coast to different cities.

He's gone to classes for this stuff (didn't even know they existed) for the past 6 months. Has sold it as a great way for passive income.

My question is, has anyone been involved with, or know anyone that's been successful with this type of investment?

Solid investment for passive income, or a fad experience?

I have two worries:
1. It's a fad investment and I end up barely making my money back, or worse, losing money that could've been invested say, in the market.
2. It ends up being a solid investment that I stay away from out of fear, my buddy ends up a millionaire because of this dumb pedal pub and I have to sit back and watch it happen and only blame myself for staying on the sidelines.

Anyways, I'm looking for some unbiased opinions on this.

Thanks.
Have seen them, but not that frequently. It kinda looks like a lot of work personally (riding one and drinking). Unsure how many return customers they reap.

Something to keep in mind- half the country endures winter 1/2 the year so a business extended into an area like that would be seasonal. Not the case for warm/tourist areas.

If it were me I'd pass.

ny_knicks
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Re: PedalPub investment

Post by ny_knicks » Sat Mar 10, 2018 10:24 pm

These already exist in a lot of cities in the south. You already missed out.

Are these classes training you to drive the pedal tavern. Or are they sales pitches trying to get you to buy into PedalPub and start your own business which will lead to fame and fortune. Likely the later.

MrPotatoHead
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Re: PedalPub investment

Post by MrPotatoHead » Sat Mar 10, 2018 10:59 pm

Explain to me how you see this as a passive investment? Do you mean you would be a sucker, errr, I mean investor. If so, as an fyi, an investment has an expected return. Have you seen his pro-forma income statement? If he does not have one, it is not an investment, it is a clown act. Also, just because he has one, does not make it a sound business venture.

Next up, PedalPub/Party bike is a veiled business opportunity that tries to not be labeled as a business opportunity in order to skirt scrutiny. I notice they are clever enough to avoid enough specific actions to also not be labeled an inadvertent franchise. That sends off warning bells.

Essentially what they are doing is selling equipment and trying to ply enough wrapping around it to make people think they are getting what amounts to a business opportunity package only without requiring enough from the purchaser to solidly put them self into the business opportunity category as they limit themselves to simply one line of revenue. When I see slipshod BS like this I generally do not waste any more of my client's money investigating further unless they specifically request me to as my hourly small business consulting rate is not cheap and it is unlikely a concept like this would hold up to even a moderate vetting.

Also note, if you pursue this you need a couple of attorney's,one with business experience to insulate you from liability and another to create a legal structure for your business relationship. The two are seperate business legal specialty areas.

Lastly, and again, this is slipshod. they recommend 2 million liability, that is a joke. Imagine one of these things loaded up with 20 something silicon value tech folks earning 6 figure salaries when a car runs into them. That 2 million may be blown as the jury considers just 10 years of one of the passengers earnings.

eltron
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Re: PedalPub investment

Post by eltron » Sun Mar 11, 2018 5:06 am

MrPotatoHead wrote:
Sat Mar 10, 2018 10:59 pm
Explain to me how you see this as a passive investment? Do you mean you would be a sucker, errr, I mean investor. If so, as an fyi, an investment has an expected return. Have you seen his pro-forma income statement? If he does not have one, it is not an investment, it is a clown act. Also, just because he has one, does not make it a sound business venture.

Next up, PedalPub/Party bike is a veiled business opportunity that tries to not be labeled as a business opportunity in order to skirt scrutiny. I notice they are clever enough to avoid enough specific actions to also not be labeled an inadvertent franchise. That sends off warning bells.

Essentially what they are doing is selling equipment and trying to ply enough wrapping around it to make people think they are getting what amounts to a business opportunity package only without requiring enough from the purchaser to solidly put them self into the business opportunity category as they limit themselves to simply one line of revenue. When I see slipshod BS like this I generally do not waste any more of my client's money investigating further unless they specifically request me to as my hourly small business consulting rate is not cheap and it is unlikely a concept like this would hold up to even a moderate vetting.

Also note, if you pursue this you need a couple of attorney's,one with business experience to insulate you from liability and another to create a legal structure for your business relationship. The two are seperate business legal specialty areas.

Lastly, and again, this is slipshod. they recommend 2 million liability, that is a joke. Imagine one of these things loaded up with 20 something silicon value tech folks earning 6 figure salaries when a car runs into them. That 2 million may be blown as the jury considers just 10 years of one of the passengers earnings.
All very good points.

When I was initially approached, as yes, an investor I asked some fairly pointed questions (not as specific as yours) to see if I could lessen this guys thunder about it. I told him the overhead i.e. licenses, insurance, beer, paying the employee, etc. would seem to dampen any profit. He told me that the bikes cost $50k and bring in around $150k/year and after all these things are handled it comes out to about 60% profit or $90k.

I told him that sounded pretty lucrative - a guaranteed $90k a year per bike. I asked if this was all accurate and true then why isn't more people jumping on board? His response is that it's a new business. I'm not sure if I agree with that. I live in a city and have seen them around many times. Never has any of it looked interesting to me - but I digress. He says he's fine with going into cities that already have these bikes, they'll be competition. I just don't see the market for these things being big enough to fit two competing bikes in one city.

I would have to imagine these classes are just like you said, educating to the point of brainwashing.

I had a general idea of the response I'd get here and this mostly sums it up.

Thanks for all the responses and I think I'll continue funneling my money towards something that won't keep me up at night worrying a car might hit it.

Thanks again.

Cigarman
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Re: PedalPub investment

Post by Cigarman » Sun Mar 11, 2018 6:31 am

From 5 years ago:

According to the city of Minneapolis's Licenses and Consumer Services department, citizens lodged 38 complaints against pedal pubs in 2013, most of which had to do with "the driver's inability to maintain proper control of the passengers at all times while piloting the vehicle."

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stemikger
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Re: PedalPub investment

Post by stemikger » Sun Mar 11, 2018 6:41 am

Drunk People plus operating a traveling pub sounds like a lawsuit waiting to happen. I rather stick with index funds. I did see one near the city of Charlotte when I went to see my sister. Things like these are very faddish and I don't see them lasting after someone tried it once.

When I drink beer, I have to pee like a racehorse, where do these people go to the bathroom? But at 54 I don't think I'm their target audience anyway.
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climber2020
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Re: PedalPub investment

Post by climber2020 » Sun Mar 11, 2018 12:43 pm

stemikger wrote:
Sun Mar 11, 2018 6:41 am

When I drink beer, I have to pee like a racehorse, where do these people go to the bathroom?
You don't stay on the pubcycle the entire time. It's a bar hopping tour. You start at one place, stay there for 15-20 minutes, get a drink, then cycle to the next bar.

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cinghiale
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Re: PedalPub investment

Post by cinghiale » Sun Mar 11, 2018 1:01 pm

stemikger nailed it: liability.

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mhadden1
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Re: PedalPub investment

Post by mhadden1 » Sun Mar 11, 2018 4:27 pm

Pretty soon I bet there will be autonomous PedalPub where the patrons just pedal and it automatically traverses the bar route. That should help with the liability. I might wait for that. :wink:
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TSR
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Re: PedalPub investment

Post by TSR » Sun Mar 11, 2018 4:45 pm

My town is lousy with these things. It goes without saying that I hate them with the white hot fire of a thousand suns, but that doesn't answer the question of whether they are a good investment. I agree with others regarding liability, and I would add what you might call "legislative risk" to the list of problems.

My city's government has relaxed the rules regarding what kind of vehicles are legal on the roads to the point of nonexistence. Extra-long golf carts, pedicabs, pedal taverns, just about anything can be on the roads downtown. All in the service of getting more people spending money downtown, mostly while drinking. It does not seem to have occurred to anyone that the people who are drinking and make the bad choice to drive might one day have an unfortunate interaction with the people on these other, inherently unsafe modes of transport. So, as others have pointed out, your investment will disappear if, say, five people are killed and six are injured on one of these things that your company owns. But that wouldn't even need to happen to YOUR company for you to suffer. When such an accident occurs, our city council will do what it ought to have done already and pass some laws about these new and unsafe forms of "transit." Maybe the whole country will unite in getting rid of these things. Surely they present a greater risk than lawn darts. I think this risk would make me not want to commit money to this investment. Best of luck!

JoeRetire
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Re: PedalPub investment

Post by JoeRetire » Sun Mar 11, 2018 8:11 pm

eltron wrote:
Sat Mar 10, 2018 7:20 pm
I've got a friend of mine that contacted me about investing in a PedalPub/Party bike... whatever you want to call it.
What does investing in a bike mean for you?

You give some money to someone who has a "sure-fire idea" for a business involving these bikes?
You buy a bike and rent/lease it to a friend?
You start your own "ride on my pedlpub bike" business?

How much of your money would you be investing?

The bikes might be fun to ride. They may be popular. That doesn't mean you can make a good investment. If it is so lucrative, why does your friend need you to invest?

In general, I'm not a fan of being a passive investor in a business that someone else operates. You are basically investing in the "someone else".

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MP123
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Re: PedalPub investment

Post by MP123 » Sun Mar 11, 2018 9:15 pm

You should definitely try one before investing in it. My wife and I went on one and as mentioned above it's hard work. But rewarded with beer! :sharebeer

Some have a battery powered backup motor, ours didn't. Topography plays a major role too. Flat cities would be much easier than say San Francisco.

You also need deals with the bars you go to. Some places were packed and clearly not interested in serving our beercycle party.

And then there's the legal and liability issues which I imagine are substantial...

It's a good time but I don't think I'd invest in it...

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Cycle
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Re: PedalPub investment

Post by Cycle » Sun Mar 11, 2018 10:06 pm

In Minneapolis these things have been in a number of "accidents," one bad one: https://www.google.com/amp/s/www.cbsnew ... seriously/

I'm sure the driver got as heafty a ticket as the law allows...

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PhysicianOnFIRE
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Re: PedalPub investment

Post by PhysicianOnFIRE » Sun Mar 11, 2018 11:02 pm

Cigarman wrote:
Sun Mar 11, 2018 6:31 am
From 5 years ago:

According to the city of Minneapolis's Licenses and Consumer Services department, citizens lodged 38 complaints against pedal pubs in 2013, most of which had to do with "the driver's inability to maintain proper control of the passengers at all times while piloting the vehicle."
That proves just how "new" this business is. They were in Minneapolis at least five years ago, a city that revelers would only have any interest in the pedal pub (due to weather) for maybe 4 months of the year, and I'm being generous.

:beer
-PoF

ryman554
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Re: PedalPub investment

Post by ryman554 » Mon Mar 12, 2018 3:29 am

mhadden1 wrote:
Sun Mar 11, 2018 4:27 pm
Pretty soon I bet there will be autonomous PedalPub where the patrons just pedal and it automatically traverses the bar route. That should help with the liability. I might wait for that. :wink:
Holy mackerel.

What a brilliant idea.

And when the patrons can no longer provide the required power, automatically take them to the designated detox zone.

I'll buy in.

HIinvestor
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Re: PedalPub investment

Post by HIinvestor » Mon Mar 12, 2018 3:49 am

Hawaii has these, at least in Honolulu. I think I have only seen them twice — once with a few lonely - looking passengers anc the other time no one wanted to ride so the”bartender” kept trying unsuccessfully to attract customers. It seems like a tough way to earn $$ from what I’ve seen. Our state has no snow, so could have the device in operation year-round but it just doesn’t seem popular.

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bottlecap
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Re: PedalPub investment

Post by bottlecap » Mon Mar 12, 2018 6:54 am

My problem with this investment is not that pedal taverns can’t make money, but that there's more on the downside than the upside.

It’s not an investment that is going to make a lot of money for the passive investor. But you could certainly lose all of your investment.

Those aren’t the bets I like to take.

JT

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