New sponsors sought for London's cycle hire scheme

Transport for London seeking minimum £5.5m a year over 7 years to rebrand Boris Bikes

by Simon_MacMichael   June 2, 2014  

London Cycle Hire Scheme Bikes On Docking Station (copyright Simon MacMichael).jpg

Transport for London (TfL) has formally announced that it is looking for a new sponsor for the city’s cycle hire scheme, inviting expressions of interest from potential sponsors prepared to spend a minimum of £5.5 million a year over a seven-year period starting in 2015.

The deal would give the successful bidder naming rights to the scheme, as well as branding on more than hire 10,000 bikes and choosing the scheme colour which would be incorporated on its roundel.

TfL also says that the new sponsor would help develop the scheme, which was launched in the centre of the capital in July 2010 and has subsequently been expanded into east and south west London.

Mayor of London, Boris Johnson, said: “With more than 30 million hires since its launch there can be no doubt that our trusty bicycles have changed the way people get around our great city.

“This is a unique opportunity for a commercial partner to put their stamp on a mode of London transport that is now as recognisable as our iconic black cabs and red buses.

“We are looking for a sponsor whose aspiration matches our own, one with the passion to take the scheme to the next level and get even more people pedalling.”

Part of fabric of London

Graeme Craig, director of commercial development at TfL, added: “Sponsorship of the Cycle Hire scheme offers a unique and exciting opportunity for a leading company to be entwined within the fabric of London.

“The Cycle Hire scheme is already part of London’s iconic transport network and will give a new commercial partner an exceptional level of exposure for their brand as we develop the scheme further.”

A formal tender document setting out the full range of rights on offer will be published online at www.tfl.gov.uk/cyclehiresponsorship on 8 July, and expressions of interest are being invited now by email to londoncyclehire2015@tfl.gov.uk.

Current sponsor Barclays announced late last year that it was ending its sponsorship of the scheme in 2015, although the mayor and TfL had repeatedly said that in 2011 the bank had agreed an extension to 2018 that would take its investment to £50 million from the original £25 million.

Barclays' sponsorship secrets

Several criticisms have been levelled at the scheme since it was inaugurated, with significant concerns over Barclays’ sponsorship.

Those include the use of a commercial confidentiality clause to stop full details of the contract being disclosed in response to Freedom of Information requests, plus the bank being able to claw back money from the planned £25 million investment when usage levels fell below target.

According to the website MayorWatch, neither is expected to be part of a new sponsor’s contract, and it says that TfL’s openness about the process reflects a transparency that was previously absent.

It adds that “a number of major brands” are believed to have already expressed an interest in backing the scheme, which could result in TfL obtaining more than the £5.5 million a year it is seeking.

Long-term viability

Green Party Assembly Member Darren Johnson said: “The arrival of a bike hire scheme in London was a real boost to cycling in the city and it’s great that it has encouraged some people to take to two wheels.

“However, the doubling of user fees, poor customer service and a lack of capacity has driven some people to stop using the scheme and the Mayor and TfL should be analysing what’s gone wrong and how to address these problems – the long-term viability of the scheme depends on it being used by growing numbers of people.

“I also have serious concerns about the way the scheme has been managed. The flawed procurement process for the sponsorship contract allowed Barclays to benefit from cut price publicity during phase 3 of the scheme. The bank failed to cough up expected extra money but still got full publicity on 2,000 new bikes.

“Meanwhile, local authorities contributed £4m but were prevented from having logos displayed due to an exclusivity agreement with Barclays.”

“Going forwards, we need the Mayor to select sponsors who really understand cycling and can be genuine partners in promoting it as one of the best, fastest and cheapest ways of travelling in London.

“We also need a reassurance that this money is additional to the £913m promised in TfL’s ten year business plan,” he added.

3 user comments

Oldest firstNewest firstBest rated

Do the same as Barclays did, promise money, have all of the bikes re-branded, then refuse to pay.

@rich22222

posted by rich22222 [119 posts]
2nd June 2014 - 20:15

9 Likes

The current fleet are reaching the stage at which renewal of the bikes, or a complete rebuild is required - as they hit the far side of the bath-tub curve and mean time between failures starts to decrease exponentially.

So a new sponsor should seriously be considering a full fleet renewal or rebuilding. Serco may also want to decline the renewal of their contract to run the scheme, which also reaches a break-point.

The operation has a major problem in that it was never meant to deliver bikes for rail commuters to get to & from their offices, using the tariff structure and hardware specified by TfL. As a result crippling costs to put out around 500 bikes at Waterloo through 126 docking points (which the system demands are used for the wasteful triple handling process in the morning and evening peak bring bike from store, dock bike, user undocks bike & user returns bike to dock, staff undock bike and move to store), and then the situation in EC1/EC2 when the 500 Waterloo bikes get parked between 08.00 and 09.00 and sit all day before a huge demand for bikes at 17.00.

The hard wired Bixi system was a special system demanded by TfL, everywhere else Bixi operates like a 4th generation system with docking points that can be paced on the street and operational in around an hour, or operated from trailers that can be wheeled out or taken away as they are filled and emptied. Systems like Call-a-Bike and Nextbike - planning to start in Bath, Glasgow & Stirling require no fixed hardware on street, and Nextbike places over 1000 extra bikes out in Leipzig for a media festival - overnight (they have operated bike hire for 2 days at Birmingham and Leeds Cycle City Expo conferences, for conference delegates). There might equally be a place for the London-built Brompton hired out through Brompton Docks as the 'keep all day/all week' hire bike. more suitable for a city commuter.

Only 2 bidders from the original 6 actually looked serious when the Serco-Bixi deal was signed and the Serco-Bixi bid combined a bidder with a system (albeit not in use anywhere at that time) and a bidder with resources, but no system. the OYBike system, already running automated bike hire in West London, since 2004, failed to prequalify to bid, as TfL's assessment considered that they had insufficient resources (odd given that at that time Veolia Transportation was a 49% shareholder). The other bidder was Clear Channel, who had both resources, and a system developed from 1997 (Rennes) onwards. JC Decaux declined to bid, as the funding model did not fit their preferred system, likewise the German Call-a-Bike did not 'fit' the operational system demanded by the TfL specification.

This time around? Well I'd expect any sponsor to want a change to the expensive operational system, and possibly (as renewal is due) an enhanced fleet of bikes. Rather than the 'all your eggs in one basket' funding by a block sponsor, TfL might look at the successful PRIVATE and PROFIT-making operation of Nextbike, who sell the branding space on their bikes to keep the operating costs down, and have a system which does not require docking stations if the number of bikes needs to be varied, or a surge of demand sends bikes to a particular location. In Berlin, bikes sponsored by an energy supplier included a USB socket for charging mobile devices as you cycled along.

Keep your eyes peeled and get along to sample the bikes in Glasgow and Bath, when they arrive later this month - or perhaps the Hourbike systems in Liverpool, Lincoln and Nottingham.

47 years of breaking bikes and still they offer me a 10 year frame warranty!

A V Lowe's picture

posted by A V Lowe [494 posts]
2nd June 2014 - 20:36

14 Likes

Sky would seem the most obvious to me with their 'Sky Ride', and the colour scheme doesn't need changing either so a quick stick on logo has it sorted!

posted by DAG on a bike [49 posts]
4th June 2014 - 19:13

2 Likes