Barclays Cycle Hire Scheme a financial "black hole" for TfL, says London website

MayorWatch says Boris bikes will have cost £225m by 2015/16; scheme fees double in new year

by Simon_MacMichael   December 20, 2012  

Barclays Cycle Hire Scheme bikes on hire station © Simon MacMichael.jpg

The Barclays Cycle Hire Scheme has been described as a financial “black hole” for Transport for London (TfL) by a London website which discovered that Barclays Bank has so far paid £13.43 million of the £50 million it is due to pay to TfL by 2018 for its sponsorship of the scheme, representing just a small proportion of its cost.

The website, MayorWatch, which obtained that details under a Freedom of Information Act request, also discovered that by 2015/16, the scheme will have cost the capital’s taxpayers £225 million, with TfL unable to say when it might break even.

The money paid by Barclays "up to the end of the 2012 financial year," according to TfL, represents a little over a quarter of that £50 million due over the eight years of the agreement, in line with what you would expect assuming the payments are staggered equally throughout the period.

The scheme came into operation in July 2010, with Barclays having earlier been named as its sponsor, but the state of the its finances is said to be one of the reasons why membership costs are due to double in the new year. That is expected to bring in an extra £6 million a year.

MayorWatch also reports that TfL is looking to London boroughs that want the scheme to expand into their territory to plug some of the gap by providing £2 million from their already stretched budgets.

TfL however declined to respond to a Freedom of Information request on that specific issue, saying that providing such information would “would adversely affect TfL’s ability” to obtain such contributions, “and therefore would be likely to prejudice TfL’s commercial interests.”

Earlier this year a major expansion of the scheme into South West London was announced, and there are also proposals in the pipeline for it to be rolled out to town centres in Outer London.

The MayorWatch website includes details of its exchange of correspondence with TfL.

11 user comments

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I've used them a few times but I go to/from the station at peak times and have found the time I spend queuing waiting for a free dock, or cycling out of my way to one with spaces, negates any speed benefits over walking.

Personally, I think one of the best ways to get people on bikes in London would be to strip out the seats from one carriage of commuter trains and allow passengers to stand in their with their bikes. I can't imagine I'm the only one who'd rather walk than look like a clown on a folding bike.

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posted by CraigS [135 posts]
20th December 2012 - 11:48

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Yes I think the future is that public transport should embrace all things bike! Why can I not just turn up and take my bike on the train or bus? Some trains have space for only two or you have to pre book, and very few buses have racks on the back. This would work UK wide, both in the city and in rural areas not just in London.

posted by 60kg lean keen ... [56 posts]
20th December 2012 - 12:12

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Although the thought of a stripped train carriage seems attractive, I'd guess that the logistics of manouvering bikes on and off in a crowded carriage would be tricky at best. Loose bikes have a capacity for entanglement beyond the dreams of bungee cords, and operators would soon lose patience with holding trains up waiting for them.

posted by sidesaddle [65 posts]
20th December 2012 - 12:47

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I can't imagine I'm the only one who'd rather walk than look like a clown on a folding bike

D Oh

Bought a Brompton ~5 yrs ago. Best commuting decision I ever made - use it every day. No problems with bike racks, space on trains, bike being stolen/damaged, getting stuck on tubes, in traffic on taxis etc. Plus it's 40 mins of daily light exercise.

Do I look like a clown? No - I stopped wearing the big red shoes - too much toe overlap. And I don't give a monkeys anyway. I value my time/flexibility far more than the opinions of the narrowminded.

posted by flobble [42 posts]
20th December 2012 - 13:20

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One way that the system would work a lot better is if the tariff and operating system were better arranged for the uses required.

The original report recognised that the bike share model would NOT work for rail stations, as the demand is tidal, and that would incur substantial costs in redistribution and balancing bikes. If the BCH scheme had a day-hire tariff, and high volume day-hire delivery the need for 126 docking points at Waterloo could be reduced to a more sensible level, and BCH bike made available on York Way, Eversholt Street (or Euston Bus Station) Victoria Bus Station etc swiftly and flexibly. Big downfall for BCH is that they have fixed docking points and even a non-tidal operating model needs 50% more docking points than bikes, to keep spaces available. Once the system gets a tidal imbalance (like Waterloo-Blackfriars Bridge-City of London) costs go up and levels of service (availability of spaces & bikes) goes down. TfL insisted on modifying the Bixi system, which is modular and portable with wireless (solar powered) operation, so that the installations have cost more and are less flexible for being altered or swapping over a full module for an empty one. The queues at Waterloo in the evenings would also be processed faster, if a hand-held docking unit could cancel the hire and pass the bikes directly on to the vans eliminating the triple handling of docking the bike, undocking it and loading the van, with up to 3 vans and associated staff at Waterloo. The system in Paris was set-up with a staff-bike ratio of 1:50 Barcelona was working 1:100 and BCH's initial 1:200 was alarmingly over optimistic IMO.

The Dutch OV-Fiets model - due for roll-out at 58 stations across the UK in 2013 does work, going from 2 to 200+ locations in 6 years, but only offered through a staffed location.

A similar picture appears for the 4th generation system operated by Nextbike, and Call-a-Bike, and others, which requires no fixed docking points, and thus dramatically reduces the costs for non bike elements of the system.

Nextbike started in 2006 and operates as a private commercial company in 5 countries, with some smaller locations having as few as 80 bikes. Scratchbikes (soon to launch their electronic version) (Go Northeast Key Card users get free membership of Scratchbikes) and the Nottingham Citybike (over 30,000 potential subscribers with Citycard and Kangaroo (hop on geddit) bus passes) are at present the basic form of the electronic system, which can also work on a small scale, but benefits from moving up to the higher level as numbers mount.

Finally there is the premium product offered by Brompton Dock, not competing with the grab and go of a bike sharing scheme, it offers 2 tariffs for those who make infrequent use of the bikes, and those who hire long-term - these are effectively the cycling equivalent of a leased car, ready for immediate use and simply swapped for any repairs or maintenance. Brompton Docks installed to date have seen sufficient initial growth to get utilisation of the bikes (and revenue) up to levels that make a promising impact on the operating costs, and as this grows - potentially to a point where demand places a step cost of a second unit, or staff costs for refilling/removing bikes from a unit, and the operating model changes slightly.

Docks in good locations such as Manchester and Ealing Broadway, have rapidly reached the level where over 50% of the bikes are out on hire, at any one time, and a healthy ratio of registered members to bikes is already established.

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

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posted by A V Lowe [477 posts]
20th December 2012 - 13:22

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There's a challenge: ride from Manchester to Ealing Broadway in a day on a Boris bike. Better than joining the LEJOG queue. Big Grin

Silly me. You're probably right....

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posted by MercuryOne [1041 posts]
20th December 2012 - 13:30

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I hate to say it, but the "30 mins free" part of the charging is what kills it as a revenue generator. It encourages you to only use the bike for trips < 30 mins - and frankly on longer runs, after 30 mins on a Boris you need a breather so you dock it, grab a drink, and then take another which is completely free. I've done the City to Vauxhall in 30 mins anyway - until the network reaches further out most people won't need to ride further.

On the flipside it's no faster than walking until the network is denser: at lunchtime I walked from near Old Street to Farringdon. Took 20 mins. To take a bike I'd have needed to walk to Old Street (5 mins), pick up a bike, drop off at the nearest station and walk to my destination (5 mins). So... I walked.

Boardman CX Team '14 | Cannondale CAAD8 '12 (written off, SMIDSY) | Scott Sportster '08

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posted by Gizmo_ [779 posts]
20th December 2012 - 18:17

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flobble wrote:

I can't imagine I'm the only one who'd rather walk than look like a clown on a folding bike

D Oh

Bought a Brompton ~5 yrs ago. Best commuting decision I ever made - use it every day. No problems with bike racks, space on trains, bike being stolen/damaged, getting stuck on tubes, in traffic on taxis etc. Plus it's 40 mins of daily light exercise.

Do I look like a clown? No - I stopped wearing the big red shoes - too much toe overlap. And I don't give a monkeys anyway. I value my time/flexibility far more than the opinions of the narrowminded.

With you there mate. I am on my second Brompton - first one was bought in 1988 and is an incho or two shorter than the newer one, but otherwise very similar. It take a little getting used to but once you do, it's brilliant. I can't maintain the speed of the full size bikes but I am not far off, and I don't care. It is far easier to deal with than a full size bike - I brought one of those home on the train this evening straight from the retailer, and it was a logistical nightmare.

And no I don't "look like a clown". Nor do the approximately 30 people who get off my train at Waterloo every morning and unfold a Brompton.

posted by Paul M [307 posts]
20th December 2012 - 21:28

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How many miles of cycle lanes could you get for £200m?

I'm a human being, God damn it! My life has value. I’m as mad as hell and I’m not going to take this anymore.

posted by Carl [134 posts]
21st December 2012 - 1:20

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Carl wrote:
How many miles of cycle lanes could you get for £200m?

Lots, but they wouldn't join up, because tfl wouldn't redesign many junctions to help cycling!

I thought the point of the bikes was that it was cheaper and quicker to do than more tube capacity?

posted by a.jumper [687 posts]
21st December 2012 - 2:50

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You could build a lot of cycle lanes, but they wouldn't be in London.

I actually think there are loads of cycle lanes already. You can find them between pavements.

Boardman CX Team '14 | Cannondale CAAD8 '12 (written off, SMIDSY) | Scott Sportster '08

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posted by Gizmo_ [779 posts]
3rd January 2013 - 16:54

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