Support road.cc

Like this site? Help us to make it better.

New Cycle to Work ‘Flexi Voucher’ founder claims to offer “better experience for cyclists”... but existing provider says it “mimics” its own scheme and is not the “real thing”

The new scheme allows customers to spread their purchases over a year at different shops, and accused “legacy” providers such as Cyclescheme and Halfords of “profiting whilst damaging independent retailers”

While the Cycle to Work scheme has helped thousands to successfully ditch the motor vehicle for a bicycle, a London-based company called gogeta is claiming to “reinvent” the scheme with its ‘Flexi Vouchers’, allowing customers to avail of them at different retailers over a year until the balance is withdrawn, while also accusing “legacy” providers such as Cyclescheme and Halfords of “profiting whilst damaging independent retailers”.

However, Green Commuter Initiative (GCI), another existing provider of the scheme, has responded to road.cc with fiery words about the new scheme, saying that the gogeta team only mimicked its own model and is “not the real thing”.

The Cycle to Work scheme was introduced by the UK Government in 1999 to promote greener and healthier alternatives for travelling to work, allowing employees to purchase bikes and other equipment while offering a tax-free benefit with the help of a ‘salary-sacrifice’.

However, in recent years, there has been some controversy around the scheme, with bike retailers claiming the commission scheme used by Cyclescheme, one of the biggest providers of the Cycle to Work scheme, was “unviable” to be continued.

> How to save money on a bike with a Cycle to Work scheme

gogeta, meanwhile, has been founded by a former independent bike retailer who was reportedly fed up with watching legacy schemes make huge profits while offering a poor user experience. It is the only cycle scheme endorsed by the Association of Cycle Traders, with a commission of three per cent as opposed to Cyclescheme’s 10 per cent.

With gogeta’s Flexi Voucher, customers can use the voucher multiple times, meaning cyclists who may not want another bike but instead parts, clothes or accessories, can take advantage and not be locked into buying everything at once.

Cyclists and pedestrians in Castle Park, Bristol (image: Adwitiya Pal)

According to gogeta, “legacy schemes are not working”. It said: “For too long, legacy cycle to work schemes such as Cyclescheme and Halfords, who together account for 90 per cent of the market, have been profiting whilst damaging independent bike retailers, charging cyclists excessive fees and providing a poor user experience.”

Barry Scott, founder of gogeta, talking about the Flexi Voucher, said: “For the first time customers won’t feel pressurised to spend everything all in one go. For too long cycle to work schemes have been riddled with compromise. Flexi Voucher brings us a big step closer to our mission of delivering the best possible retail experience for cyclists, that just happens to be tax-free.”

However, GCI told road.cc that “the Gogeta team spent a lot of time quizzing GCI about its model before going off to develop a platform which mimics the GCI model”.

> Cyclescheme now claimed to be "unviable" for retailers following change in threshold

GCI said: “Like any mimic, it’s not the real thing and potentially has flaws which could mean an employee might lose their bike even though they’ve paid for it.

“There’s a lot of noise about reinventing the Cycle to Work scheme but some fiddling with supplier’s commission rates doesn’t compare with GCI’s innovation of removing the £1,000 cap, thus making electric bikes available.”

GCI said that it has the lowest reseller commission rates on sale goods, because GCI uniquely allows the supplier to pass commission on. It added: “The supplier is already contributing enough and if the employee is getting a big discount as well as the tax break, we know they’re happy to cover the five per cent. 

“gogeta along with Cyclescheme prohibit this and even after the supplier has given up so much, they still want the supplier’s three per cent as well as the four per cent they charge the employees. Often the employer also has to pay a fee to use their platform. GCI is a not-for-profit and its only revenue is the retailer commission.”

gogeta's founder Barry Scott has responded to road.cc regarding GCI's comments, saying that “Flexi Voucher is indeed completely new and has not been done before” and that only gogeta offers “customers the ability to spend at different retailers at different times with one voucher”. 

He said: “As a business which says it supports independent bike retailers, we’d expect GCI to welcome any new provider that challenges the dire status quo of legacy schemes such as Cyclescheme and Halfords and their punitive commissions.

“Whilst gogeta certainly hasn’t mimicked GCI’s model (with a totally different fee structure and product offer) we certainly commend them for what they have done in reducing commissions to retailers.”

> Chancellor urged to open up Cycle to Work Scheme to lower-paid and self-employed workers

While the Cycle to Work scheme wars carries on, it was only in 2020 that the scheme was deemed “unviable” for retailers, with Cyclescheme’s flat rate of 10 per cent commission on bicycles coming under scrutiny from the cycling industry as the £1,000 price limit on the bikes being purchased was scrapped.

In September 2020, Cyclescheme, owned privately by an American firm after being founded in 2007 in Bath, was forced to slash retailer commission rates after the growing industry pressure.

Last year, a Labour transport spokesperson had branded the Cycle to Work scheme “outdated” and “no longer fit for purpose” for London, and claimed that the initiative needs “wholesale reform” to help boost “affordable, healthy and greener travel options for Londoners”.

Labour’s call to reform Cycle to Work came just over a month after a number of organisations, including the Cycle to Work Alliance, the Co-op, the Federation of Small Businesses, and British Cycling, published a letter urging then-Chancellor of the Exchequer Rishi Sunak and cycling minister Trudy Harrison to open up the scheme to lower-paid workers and the self-employed.

Adwitiya joined road.cc in 2023 as a news writer after graduating with a masters in journalism from Cardiff University. His dissertation focused on active travel, which soon threw him into the deep end of covering everything related to the two-wheeled tool, and now cycling is as big a part of his life as guitars and football. He has previously covered local and national politics for Voice Wales, and also likes to writes about science, tech and the environment, if he can find the time. Living right next to the Taff trail in the Welsh capital, you can find him trying to tackle the brutal climbs in the valleys.

Add new comment

13 comments

Avatar
Rapha Nadal | 9 months ago
1 like

Being able to spend across different shops is a great idea but who then pays the commission?  Would it be 3% of each transaction?

Avatar
wycombewheeler replied to Rapha Nadal | 9 months ago
1 like

Rapha Nadal wrote:

Being able to spend across different shops is a great idea but who then pays the commission?  Would it be 3% of each transaction?

Pretty sure the way these things work is by applying a discount, effectively taking the commission from the seller, so yes 3% of each transaction

Avatar
Abdoujaparov replied to Rapha Nadal | 9 months ago
0 likes

The bike shop pays a commission charge each time the voucher gets spent.

Seems like a standard cost of sale transaction to me, just like when you spend on your credit or debit card. Not sure what all the fuss is about. Win win all round I say. 

bike shops must be pleased not to get shafted by those other schemes which seem very pricey.

Avatar
hawkinspeter | 9 months ago
13 likes

It seems to me that a far simpler scheme would be to just zero-rate VAT on bicycles and equipment below a certain amount (e.g. £3000).

Avatar
momove replied to hawkinspeter | 9 months ago
2 likes

And this would help people on incomes that don't qualify or self employed people.

Avatar
NOtotheEU replied to hawkinspeter | 9 months ago
8 likes

hawkinspeter wrote:

It seems to me that a far simpler scheme would be to just zero-rate VAT on bicycles and equipment below a certain amount (e.g. £3000).

There are some serious flaws in your suggestion.

1. It's simple and easy to understand

2. It's common sense

3. It would benefit everyone who buys a bicycle

4. Small independent shops without any shareholders might benefit

5. Corporations would have to find a different way to pretend they cared about their employees and the environment

Avatar
barryfromgogeta replied to NOtotheEU | 9 months ago
1 like

I dont see why its an either or
Cycle to work can save employees up to 40%, so a 20% saving is a step back
Why not do both?
The cycle market in the UK is c.£1.5Bn. Its small beer in grand scheme of things....and the health benefits for NHS etc are materially higher than the tax losses
Furthermore a much bigger question, as Rishi fights for motorists rights, is why you can buy an EV car for 100k on salary sacrifice, with no useage restictions, whereas with cycle to work it has to be called that
Why cant we just have a cycling salary sacrifice rule.....

Avatar
hawkinspeter replied to barryfromgogeta | 9 months ago
4 likes

barryfromgogeta wrote:

I dont see why its an either or
Cycle to work can save employees up to 40%, so a 20% saving is a step back
Why not do both?
The cycle market in the UK is c.£1.5Bn. Its small beer in grand scheme of things....and the health benefits for NHS etc are materially higher than the tax losses
Furthermore a much bigger question, as Rishi fights for motorists rights, is why you can buy an EV car for 100k on salary sacrifice, with no useage restictions, whereas with cycle to work it has to be called that
Why cant we just have a cycling salary sacrifice rule.....

Agreed.

Maybe we should table a motion at the next Evil Cycling Lobby meeting

https://evilcyclelobby.teemill.com/

Avatar
mark1a replied to barryfromgogeta | 9 months ago
2 likes

barryfromgogeta wrote:

...so a 20% saving is a step back
 

Taking standard VAT away isn't even a 20% reduction, it's 16.7%.

I would also expect over a (short) period of time, UK RRPs and margins moving upwards to match the previous VAT inclusive prices. 

I'm very much in favour of the current schemes, but also appreciate it has limitations for those on minimum wage, unemployed, etc. 

Avatar
barryfromgogeta replied to mark1a | 9 months ago
1 like

I am saying this with love as an ex cycling retailer....but you are right.
SRPs will then go up, and discounts will then increase! So net is nothing will really change....

Salary sacrifice is the solution - it just needs to be done much better.

Avatar
quiff | 9 months ago
3 likes

Seems slightly sour grapes from GCI. Yes, they pioneered removing the £1,000 cap, but all other providers have caught up. While they may have legitimate reservations about whether the flexible voucher works within the government rules, the ability to use it flexibly does seem to be genuinely innovative and useful. 

Avatar
barryfromgogeta replied to quiff | 9 months ago
2 likes

Hi all. I am Barry, from gogeta. I had hoped the article would solely focus on  what we think is a real advance for users - the ability to pick and choose where and when to use the voucher...

Instead the angle seems to have been us against GCI - which is a real shame. I am a long time admirer of their efforts.
The reality is Cyclescheme and Halfords control 90% of the UK Cycle to Work market, and they respectively charge 10% and 15% to retailers. So creating an argument between us charging 3% or GCI charging 5% seems to be missing the forest for the trees....

Anything that is better for consumers and retailers is great news in my eyes. We welcome innovation - cycle to work is 24 years old now....and could do with a much needed shot in the arm...
 

Avatar
NOtotheEU replied to barryfromgogeta | 9 months ago
0 likes

barryfromgogeta wrote:

I had hoped the article would solely focus on  what we think is a real advance for users . . . . Instead the angle seems to have been us against GCI

The reality is Cyclescheme and Halfords control 90% of the UK Cycle to Work market, and they respectively charge 10% and 15% to retailers. So creating an argument between us charging 3% or GCI charging 5% seems to be missing the forest for the trees....

Maybe a bit of corperate influence going on?

Latest Comments