Ann Arbor Pedicab co-owner Calvin Schemanski with his fleet. Schemanski and partner Josh Lycka, both 20, offer a pedal-powered taxi service around Ann Arbor.

Janet Miller | For AnnArbor.com

When Calvin Schemanski and Josh Lycka ran cross country at Petoskey High School, they would joke about how they should hitch themselves up to a rickshaw and start a business.

They’re no longer joking.

Schemanski, a junior at the University of Michigan’s Stephen M. Ross School of Business, and Lycka, a junior at Grand Valley State University, own Ann Arbor Pedicab LLC, transporting football fans, visitors and late-night revelers around town in a small carriage powered by a bicycle. 

While the two students introduced Ann Arbor Pedicab to Ann Arbor last fall on a limited basis, they have expanded coverage this fall to three days a week, Thursday through Saturday, until inclement weather shuts the taxi service down for the season. 

They own a fleet of three vehicles and have six part-time employees.

What started as a joke grew into a business plan during the winter break of their freshmen year of college, Schemanski said. 

“We were working in the kitchen of a (Petoskey) restaurant and we were talking about how we wanted to do something different that summer. We thought a pedicab would be a lot of fun.”

They were lucky when they began an Internet search for vehicles: New York City had limited the number of pedicabs allowed in the city and they were able to buy two vehicles for $2,000 each. New models would have cost $3,400. They found the third pedicab on an Amish farm in Pennsylvania. The seed money came from their personal savings.

In summer 2009, they launched Petoskey Pedicab in their hometown, carting tourists from beach to town, giving tours along the way and catering mostly to families. Half-way through the summer, they realized they were missing a large market: When the bars closed, there was a group of mostly young people looking for a way home. 

By the end of the summer, each had earned about $3,500.

"It wasn’t that much, but the first year for any business can go negative, so it was cool,” Schemanski said.

The nightlife niche also planted the idea of transporting the pedicab business to Ann Arbor during the fall, he said. “If we did that well in the small town of Petoskey, we wondered how well we could do in Ann Arbor.”

They rolled out Ann Arbor Pedicab on a limited schedule in September 2009. While the service ran during football game days, they hit paydirt with the night shift. 

“I could make more in the Saturday 10 p.m. to 3 a.m. shift than I could make in 12 or 14 hours in Petoskey,” Schemanski said. This season, the five-hour night shift can yield up to $150.

The cost for most rides is left up to the passengers, although $2 a person per ride is suggested. Tips are frequently generous and usually come with a good attitude, Schemanski said. “A lot of people throw a $20 my way.” Most trips are less than a mile.

The pedicab business has become a laboratory for their classroom learning. They have taken lessons in accounting, marketing and advertising to drive strategies for the business. 

The business has become increasingly sophisticated as they work their way through school, and revenue doubled for Petoskey Pedicab from 2009 to 2010, Schemanski said. Customer awareness also increased during President Obama's visit during spring commencement.

They realized that transportation wasn’t the only revenue stream. They began selling advertising on the rear of the pedicab and on shirts they wear while pedaling. Part of the advertising package also includes an agreement that pedicab drivers promote a business when asked for recommendations and will hand out business coupons.

 “Marketing studies have shown that 10 to 20 percent of people believe a commercial or a billboard,” Schemanski said. “But 70 to 80 percent of people believe a personal recommendation.”

The taste of entrepreneurship has left Schemanski wanting more, he said. “When I graduate, I’d like to start my own business or work with a start-up.”