Dec. 3 (Bloomberg) -- Mayor Boris Johnson’s 140 million-pound ($218 million) project to encourage more Londoners to get on two wheels may become profitable as access to his cycle-hire program is widened.
With 1.8 million journeys to date and 25 million pounds of sponsorship from Barclays Bank Plc, the initiative “could be one of the most cost effective” forms of public transport in the capital, Johnson’s transport adviser Kulveer Ranger said in an interview last week.
While Johnson had pledged in his 2008 election manifesto that the program wouldn’t cost taxpayers anything, he said in July there was a need to be “realistic” about when it would make money. Ranger estimated before the program’s start it could lose as much as 5 million pounds a year. With usage being extended beyond registered members as of today, he no longer sees it as money losing for London taxpayers.
“We want it to be something that can stand up on its own right and it probably won’t makes oodles of cash for the city but it does say something about the look and feel of the city,” Ranger said in the interview at his City Hall office. “On an operational and ongoing basis we hope that the scheme will pay for itself because of the number of users that we’ve got and the sponsorship to support it as well.”
Since the program’s July introduction, only the 108,000 members could access the bikes, using a key fob purchased from Transport for London. From today, anyone with a debit or credit card can obtain a personal identification number to unlock one of the 5,000 cycles, now popularly known as “Boris Bikes.”
Casual users, like members, will pay six pounds for a two-hour rental or 50 pounds for a full day. The first 30 minutes, though, are free and a bike can be collected from any of the 346 stations and left at another.
“It’s good value for money,” Reno Marcello, an economics student at London Metropolitan University said in an interview. “All my bike journeys are less than 30 minutes by design.”
Around 93 percent of all cycle-hire journeys are under 30 minutes, according to Hannah Russell, a spokeswoman for the Mayor’s office.
France’s “Velib” program, combining the words for bicycle and freedom, was an instant hit in July 2007 with 1 million customers after 18 days. A third of the 24,000 bikes installed, though, have been stolen, with thousands more damaged.
With its bikes weighing 23 kilograms, the London project has been a greater theft-deterrent with just eight bikes stolen in its 18 weeks of operation, with two being returned.
“It’s quite heavy and unlike a Dutch bicycle you have to lean forward,” recruitment consultant Katrina Mantay said in an interview on her hire-bike. “They’re great but has it changed my life? No.”
Barcelona and Brussels are among European cities that have introduced public cycle-hire systems, and Ranger has hosted delegations from other cities, including Madrid and St. Petersburg.
“We saw what they did in Montreal and Paris, and we learnt from their mistakes, took advice from them and we have delivered something that works,” Ranger said.
From 2012, the bikes will be scattered eastward beyond London’s royal parks and nine central boroughs and toward the site of HSBC Holdings Plc headquarters in Canary Wharf and the Olympic Park in Stratford. At completion, around 8,000 hire bikes will be available, covering 65 square kilometers of the capital.
“They’re pretty heavy and robust, so I feel safe on them,” Marcello, 33, said by Moorgate subway station. “Though, my girlfriend is tiny and she struggles to get them out of the dock.”
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