Subscription-based bike hire schemes on a roll

Lianne Fonseca says her life has been "transformed" by the electric bike she started using during the pandemic.

"It's game changing," claims the 31-year-old product manager who lives in Toronto, Canada.

"I wasn't a cyclist whatsoever before. Toronto isn't really a bike-friendly city, although it's getting better.

"But the pandemic meant it was empty of cars, and so I started biking a little. I now e-bike to see my friends, to do my grocery shopping, and it enables me to arrive at the office non-sweaty."

Surprisingly, the e-bike Ms Fonseca is referring to isn't actually her own. Instead she is one of a growing number of people on both sides of the Atlantic renting their bikes long-term through a subscription model.

Ms Fonseca rents hers for 149 Canadian dollars ($112; £91) a month through an e-bike rental company called Zygg. For her this generally means from March to October, pressing pause to avoid the harsh Canadian winter season when temperatures in Toronto can fall to below -30C.

Still, why rent? "It's really expensive to buy an e-bike," she responds. "They can be worth a few thousand dollars, and I don't have the confidence to select which one to buy. And I'm not confident I could fix it if it went wrong."

Instead, if anything stops working on her rented e-bike then the hire firm repairs it.

Over the past decade or so, we've seen a boom in short-term bike hire schemes as a way to navigate cities. First came docked bike systems, such as London's Santander Cycles or "Boris bike" scheme.

These require you to remove a bike from a docking station, and then return it to one.

They were subsequently followed by bike, and then e-bike and e-scooter hire schemes that did away with the need for the stations. Instead you use an app to locate where the nearest bikes and scooters have been left at random spots on the nearby pavements by the previous users.

Such has been the global growth of these "dockless" systems that they have long been criticised as a form of street litter.

Putting aside this controversy, the business model of these street-side dockless and docked schemes is that you hire the bike or scooter for a single journey, the half an hour or so that you need it for.

By contrast, the new trend is that you hire a bike or e-bike for the long term, by paying a monthly subscription fee.

Zygg chief executive Kevin McLaughlin launched the business in Toronto in 2020, followed by Vancouver last year. He now hopes to expand to other Canadian cities and across the US.

In addition to serving members of the public, the firm also rents out the e-bikes to couriers and food delivery companies.

"The idea is to take an expensive asset worth around C$4,000 and give that to someone for about C$150 a month, and we'll take care of all the hassle," says Mr McLaughlin.

"We're trying to provide a way to move forward when it comes to climate change, and traffic safety, and urban transport. It's more environmentally beneficial if more people use bikes instead of cars."

In London, Jean-Michel Chalayer hires a bike long-term from Buzzbike. The 36-year-old uses it to pedal all across the capital, from his home to his office, to meetings in the City, and to his weekly football games.

Mr Chalayer estimates that he cycles up to 50km (31 miles) a week. The founder of mobile beauty app LeSalon pays for it via the UK-wide Cycle to Work scheme, whereby £20 is deducted from his monthly pay packet.

"My other bike was second-hand and I got fed up of spending loads of money on maintenance all the time," says Mr Chalayer. "Plus I was never confident it wouldn't be stolen.

"This way I get a really good bike and I never stress too much about leaving it anywhere. If I have a problem with it, then I just message them and they come around and fix it when it's convenient for me."

One of the pioneers of long-term bike subscription is Dutch company Swapfiets, which means "swap bike". Launched in 2014, it now has 280,000 active users across 60 European cities including Amsterdam, Vienna and London.

Rentals start from £16.90 a month for a one-speed, standard bike, and from £59.90 for an e-bike, which now accounts for about 15% of its subscriptions.

"Sustainability is an angle now, but when we started what we really wanted to do was solve the problem of bike ownership, which can create hassle due to the need for bike repairs if it's not maintained," says Swapfiets' co-founder Richard Burger.

"If we can't repair the bike onsite, we'll give you another one to get you on your way again."

Who is their target audience? "We do see a lot of expats that just want access quick to a bike, and then drop it back when no longer needed six to 12 months later," says Mr Burger. "But we also have young professional students who hire for three or four years."

It's not just adults who can join in the long-term bike rental trend. London-based Bike Club is aimed at children aged from four to 12, and has 55,000 active members across the UK and Germany, where it recently launched.

"We realised that a kid's subscription model made sense as they grow physically and need to have lots of different bikes," says co-founder Alexandra Rico-Lloyd.

"When a family no longer needs a bike, they send it back. Then another family will get use of it. As it's serviced fully each time, it extends the lifespan of that bike."

Bike Club offers 100 different styles of bike, which cost between £5 to £25 a month to rent.

John Parkin, professor of transport engineering at the University of the West of England, says the bike-docking hire schemes helped enable the long-term subscription businesses to take off. This is because more people got used both to cycling and to using a bike that they didn't own.

However, Prof Parkin, who is also deputy director of the university's Centre for Transport and Society, says a major challenge for the companies involved is the sheer capital expenditure of buying all the bikes in the first place. "It's massive capital and it's burning capital," he says.

"I'm not sure where the profitability lies, as maintenance and moving them across cities is a massive cost, so keeping a lid on costs is probably a challenge for such companies."

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Zygg's Mr McLaughlin agrees it is difficult. "It's a challenging time to grow a heavy assets business and raise capital," he says.

As Zygg and others in the sector are small, private firms they are not obliged to report their sales and profit figures.

Still, the environmental benefits are huge. Prof Parkin adds: "Any way of making cycling and cities more efficient rather than people moving round in big vehicles so they can get to their final destination easier is good news."

Back in Toronto, Ms Fonseca is looking forward to hiring her next bike once the Canadian winter is out of the way.

"It's so much more convenient than going by car, and it feels nice riding through leafy neighbourhoods."