I was without a bike for the better part last year; I also bought a car in the same time span. With every gas station fill-up, I dreamed of peddling around the city instead. As gas prices rose, this feeling became more and more intense. I would have gladly ditched the car for two wheels and some handle bars.
Philly Electric Wheels hopes that sentiment is contagious.
A store dedicated to electric bicycles, Philly Electric Wheels has discovered that its business is directly related to the cost of crude—the higher gas prices go, the more bikes they sell. At a cost of two cents per mile, an electric bicycle beats out a gas-guzzling car any day. This has inspired store owner Afshin Kaighobady and his landlady to link the store's rent to the rise and fall of crude prices.
The monthly baseline rent for the store will be tied to $80/barrel starting in September. If the price of crude goes up, the rent will go up. If the price of crude falls, the rent will follow. Kaighobady has faith that if the prices go up, sales will increase, and in turn, he will be able to afford the higher rent. It's a gamble—if the rent goes up and the sales aren't there, he will come out on the losing end of this deal.
According to an e-mail from Philly Electric Wheels, the average price of crude was $91 per barrel with a high of $126 in 2008. But in 2009, the average cost was $53 per barrel. So, recent history demonstrates the volatility of the market, but PEW obviously believes, in the long run, that the cost of crude will go up—and so will people's love of electric bicycles.
Philly Electric Wheels, 550 Carpenter Lane, Mt. Airy