Palm Springs City Council took the first step last week toward reducing insurance requirements that pedicab and party bike operators say are forcing them out of business.
The council conducted a first reading of an ordinance that would lower the current $10 million umbrella insurance policy requirement to the state minimum of $500,000, while maintaining the existing $1 million general liability coverage requirement. Local operators told council members the current umbrella policy requirement is unattainable and threatens to shut down their tourism businesses.
The current ordinance was adopted in February 2018 with the high insurance requirement put in place due to limited police staffing and public safety concerns at the time, according to a city staff report.
Tom Perry, owner of The Mic Bike, said his company partners with Hotel Zoso and operates one of three pedicab businesses in Palm Springs.
“The three owners have been told by at least seven insurers that we cannot get umbrella policies,” Perry said during public comment. “This has led to a lot of back and forth trying to figure out why we’re getting different information.”
Shannon Miller and Jennifer Bamford, owners of Sunny Cycle, echoed Perry’s concerns during the meeting. Miller said their business has operated in downtown Palm Springs for over a decade without any accidents or claims, but cannot obtain the required umbrella coverage.
“After lengthy conversations with many insurance companies from across the country, we have learned that they do not and will not write an umbrella policy for our type of business,” Miller said.
The insurance issue came to light in February 2025 when city staff discovered pedicab businesses operating without required city permits, instead operating solely with business licenses. When staff reached out to bring the businesses into compliance, operators revealed they could not obtain the required umbrella insurance.
Two applicants provided communication from their insurance carriers indicating they would not be able to provide an umbrella policy in the required amount and that Palm Springs’ requirement was considerably higher than other cities, according to the staff report.
The insurance problem stems from how Palm Springs defines pedicabs in its municipal code. Director of Special Programs and Compliance Veronica Goedhart explained that the city includes party bikes in its pedicab definition, but insurance companies treat them differently.
“Palm Springs includes our party bikes in its definition of a pedicab. Other cities – and more importantly, insurance companies – do not,” Perry explained. “They consider a pedicab the equivalent of a taxicab powered by a human.”
Party bikes typically accommodate groups of 12 or more riders for entertainment tours around downtown, while traditional pedicabs transport passengers from one location to another like a taxi service.
The proposed ordinance would align Palm Springs with state vehicle code requirements and other California cities that regulate similar businesses.
Council Member Jeffrey Bernstein supported moving forward with the first reading while allowing staff to explore additional options, including potentially bringing the operators under the city’s umbrella policy.
The proposed ordinance includes several other changes beyond the insurance reduction. The city would update the definition of pedicabs to include “megacycles,” which are four-wheeled pedal and mechanical powered devices with seating for eight or more passengers that do not exceed 15 miles per hour.
The ordinance also includes specific language requiring the city be named as an additional insured on policies and limits sound amplification so it cannot be heard more than 50 feet away while being operated. The ordinance will require a second reading at a future council meeting before taking effect.
