By Amy Tsao

On a mild winter day in January, the phone won't stop ringing in the office above George Bliss's garage. Between calls from drivers who want to lease a cab for the day, the 50-year-old owner of Pedicabs of New York recounts the challenges of the past year. He has sold half of his pedicabs to cover the rising insurance premiums, which have doubled from a year ago.

He adds that some of the newer operators mistreat tourists and aren't driving safely, tarnishing the image of pedicabs. "They don't uphold standards," he says. "It's a tragedy."

PEDAL PEDDLERS.  The unusually warm winter weather, prime operating conditions for pedicabs, isn't helping his mood, either. Since Bliss is between insurance policies for a few days, he refuses to let drivers ride without coverage, instead directing inquiries to a competing operator.

There was a time, not so long ago, when very little in rough-and-tumble New York could be called good, clean fun. Now, in the amusement-park ambience of Times Square, gourmet popcorn stores have replaced peep shows. Pedicabs, too, have increased in number with the sanitized scene. Some 200 of these modernized, bicycle-powered rickshaws prowl Midtown, up from just a handful 10 years ago.

Their numbers suggest times are good for operators of this novelty transportation. But for all the expansion of the pedicab niche, the business has its share of growing pains -- from rising insurance rates to impending regulation and increasing competitive pressures.

AT THE CROSSROADS.  Indeed, Bliss and the rest of the nascent pedicab outfits in New York are at a crossroads. In order to keep growing, operators want to build a reputation as a safe alternative to traditional taxis. But without standard practices and equipment, insurance companies find pedicabs unsavory clients.

"Sometimes underwriters pull pricing out of the air, since there's not much history," says Scott Ziller, an agent at McKay Insurance Agency, based in Knoxville, Iowa, one of the few sellers of pedicab insurance in the country. McKay handles policies for 30 pedicab businesses, representing about 500 drivers, including five outfits in New York.

Operators say they're willing to give up the freedom of not being regulated to bring more legitimacy to the sector. The goal is to find the right balance of ensuring public safety and promoting entrepreneurship. "I'm looking forward to regulations, provided the city doesn't overregulate us," says Peter Meitzler, owner of Manhattan Rickshaw, operator of 13 pedicabs. New York officials are still debating what form those regulations might take.

DIDN'T STAY IN VEGAS.  Cities across the country have handled burgeoning pedicab businesses in different ways. In 2002, Santa Barbara, Calif., demanded that drivers apply for city permits. To do so, applicants have to provide a driver's license and proof of insurance. The city also performs background checks on drivers, and it reserves the right to revoke licenses if pedicabs aren't in good operating condition.

Las Vegas last year banned the vehicles from the Strip, where the bulk of the city's pedestrian and tourist traffic takes place. "Pedicabs were causing a lot of conflict," says Sandra Avants, chairman of the Nevada Transportation Services Authority, referring to accidents and various complaints from limo drivers.

The city subsequently granted pedicabs the right to operate in a limited area, as long as they carry insurance. "We didn't want to restrain the business from operating unless there was a public-safety issue of health and welfare of passengers and those sharing the road with pedicabs," says Avants. However, because the Strip ban took away the operators' most lucrative turf, they have virtually disappeared from Las Vegas.

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