Telegraph claims Boris Bikes struggling to make money, but it's early days

A report in The Daily Telegraph claims that London’s Barclays Cycle Hire Scheme struggled to make money during the three months following its launch in July 2010.

The finding is based on data released by Transport for London (TfL) in November that  the newspaper says demonstrate that during the first 96 days of operation, 95% of journeys were of less than one hour’s duration, and therefore free to users other than the access fee charged to use the service, which starts at £1 a day.

However, there’s a bit of confusion over that claim, since hire of the navy blue Boris Bikes is free for the first 30 minutes, and once that is exceeded, charges kick in, starting at £1 for a period of between 30 and 60 minutes and escalating steeply after that to a maximum of £50 for between six and 24 hours.

Beyond that, £150 is charged as a late return fee, which the Telegraph reports happened to 939 users during the period analysed, accounting for 44% of the £323,545 revenue the scheme generated in that time.

Thumbing back through old press releases from TfL, however, we’ve found one from early November, around the time the data relate to, which confirms that 95% of all journeys were 30 minutes or less, and therefore free – so it seems that what the Telegraph has slipped up on is the duration, rather than the percentage of free journeys.

While we’re awaiting a detailed response to the claims made in the Telegraph’s article from TfL, the newspaper says, correctly apparently, that only around 5% of journeys in the first three months, 72,700 out of 1.4 million, generated money beyond the access fee.

It also queries whether TfL will manage to achieve its goal of seeing the £140 million scheme break even within three years of launch, with revenue coming from a combination of access fees and hire charges as well as Barclays’ five-year, £25 million sponsorship of the initiative.

Clearly, usage patterns in the first three months of the scheme are not going to be indicative of the longer-term trend over three years – the day that saw the lowest usage, with 3,756 journeys, was 1 August, just two days after launch, while 26,801 were made on the busiest day covered by the data, 3 November.

With the scheme belatedly opened up to ‘casual users’ – non-members, in other words – from early December, you’d expect average daily usage to trend upwards, particularly once we move into spring and summer, to get closer to the planned 50,000 journeys a day.

Moreover, TfL stated in October that it believed that casual use, not included in the figures which cover the period 30 July to 16 November would represent the “bigger revenue generator” of the scheme.

It’s also worth bearing in mind that by 2012, the scheme will have expanded into East London in time for the Olympics, with an extra 2,000 bikes on the road taking the fleet up to 8,000 units and an additional 4,200 docking points.

All of which means that in the first instance, at the earliest it will be the end of 2011, by which time the scheme will have been open to members and casual users for a year, that we’ll have a clear idea of data on an annual basis and be able to draw meaningful year-on-year comparisons and hazard a guess at future growth patterns.

It's also pretty certain that there will be an extra boost in usage in 2012 when the scheme expands eastwards. Any future expansion into other parts of the capital would also be likely to increase usage.

The Telegraph’s analysis was based on data released by Transport for London under a Freedom of Information request from open data developer Adrian Short.

Other features of the scheme’s first three months of operation are that the most popular journey is one through Kensington Gardens, starting at Black Lion Gate and ending at Palace Gate, while the most popular docking station is at Waterloo Station and the least used one at Oval Way, located in the shade of the gasometers that oerlook the South London test match venue.