It is not cheap but why not, you are only in Funchal once. It is one of those thing you want to have done when in Funchal. These rides was a convenient way for the rich people to get down to the city center back in the days so it was nice to have experienced it. What I can really recommend is once the ride is over, to walk the the last part of the hill down to the city center. The Toboggad sled ride takes you to two third of the way down, the last part you can walk or take a taxi. We walked straight down and it was a nice and easy walk along beautiful buildings and local houses.
By the way, once you are on the sled ride remember to smile for the guy running out on the street with a camera. I was not expecting that and thought it was a random tourist taking photos on us. The photo was so funny I had to buy it :)
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