Suggestion to replace cycle-to-work-scheme

HoWB Dave
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Suggestion to replace cycle-to-work-scheme

Postby HoWB Dave » 12 Apr 2010, 9:58am

I am the proprietor of an independent bicycle shop. I have opened four months ago and despite newspaper adverts I am finding it difficult to drum up new bike sales.

One of the main types of new bike sale nowadays seems to come from the various cycle to work initiatives. However I have a problem with these initiatives for a number of reasons both generally and specifically with how it impacts my business:

  • The scheme seems very open to abuse. Nobody is really keeping score of how often the bikes acquired under this scheme are being used for their intended purpose, and other forms of abuse are possible. This may lead to a political backlash against bike to work initiatives
  • Access to the scheme is dependent on whether your employer decides to participate in one of the schemes
  • Although Cyclescheme is open to all retailers, many of the competing schemes tie the purchaser into buying their bike with one particular retailer

My suggestion for an alternative is to use a scrappage scheme. Scrappage has, from our point of view, been successfully piloted within the automotive trade and found to be successful, so with a few tweaks scrappage may be suitable for rolling out into a dynamic sector such as the cycle industry. The alterations I would make would be to target the scheme so as to scrap the countless Bicycle Shaped Objects on british roads - perhaps by defining a "bare-bike" weight above which a bike becomes eligible for scrapping (BSO's are notoriously heavy). The bikes ellegible for grant assistance could also be defined so as to ensure that impractical bikes are not simply traded in for newer impractical bikes. Maybe set a minimum price, also make mudguard and rack braze-ons mandatory?

As I see it, the advantage of scrappage would be as follows

  • More equitable amongst the consumer - it is not dependent on the workplace policy or intended use of the bike
  • Removes heavy impractical bikes from the road, similar how the car scrappage scheme was claimed to rid the streets of polluting cars
  • Fairer for the independent bicycle dealer - if done correctly it would put local stores on an even footing with large retailers
  • Would reduce the opportunity for abuse of the scheme that exists in current initiatives

I would be interested to hear what other CTC members would like to say on the above suggestion, and any comments that they could add. If the response is positive I will consider writing to the Association of Cycle Traders and the CTC proper to suggest this change to bicycle purchase assistance. Of course the larger retailers are unlikely to support any change to the current workplace bike initiatives, becasue a lot of bikes are sold under these initiatives, with the sales skewed more than average to big retailers who are able to cherry pick the large employers by offering exclusive contracts that are very attractive to these employers.

Regards
David

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hubgearfreak
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Re: Suggestion to replace cycle-to-work-scheme

Postby hubgearfreak » 12 Apr 2010, 11:06am

good luck in your new shop, but a scheme that disposed of DL1s and replaced them with aluminium hybrids at tax payers expense wouldn't get any support from me.

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Si
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Re: Suggestion to replace cycle-to-work-scheme

Postby Si » 12 Apr 2010, 12:10pm

I'd say that what every one wants from a utility/commuter bike is different so you may shut out a load of people from using the cycle to work scheme. For instance, my preferred choice used to be a lightweight race bike because I wanted to get there ASAP and the route was hilly and long. I had changing facilities at work so wasn't worried about a bit of road dirt. Your suggestion would probably denied me using the scheme.

Likewise, I think that defining what a BSO is is going to be a lot harder than you think. My more recent commuter weighed in at just shy of 40 pounds. It was a great bike for the commute: tough, luggage capacity, 'guards, etc and very undesirable to thieves. Why would we want to scrap bikes like this that are ideal for purpose?

I understand that from an economic point of view that bike scrapage might be a good idea if all the problems could be ironed out. But, not being a bike shop owner, I don't look at it in merely economic terms. I would just see it as a whole load of perfectly good bikes being binned off - lots of needless waste, just like much of the car scrapage scheme.

Plus, as it is the c2w scheme might allow some manipulation of the system but it does promote cycling, and the more people on bikes, of whatever kind, the better.

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Re: Suggestion to replace cycle-to-work-scheme

Postby Big T » 12 Apr 2010, 1:07pm

One of the big attarctions of the cycle to work scheme, for me anyway, is the ability to pay for the bike monthly, without having to pay any interest. I'd baulk at paying £1000 cash for a new bike, but I'm quite willing to stump up the £60 or so per month that it costs me on cyclescheme. Your suggestion will give me a discount on a new bike, but won't let me pay monthly.

I'm also interested in what you describe as abuse of the scheme. Do you mean people not using the bike to cycle to work, or buying inappropraite bikes e.g. time trial bikes or track bikes with no brakes? Can you expand?
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kwackers
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Re: Suggestion to replace cycle-to-work-scheme

Postby kwackers » 12 Apr 2010, 1:18pm

All schemes are open to abuse.

If the rewards are the same then the near half price discount would mean that even a rusty nail wouldn't be safe to a pair of thieving mitts who fancied a new bike. They'd probably even consider themselves to be doing you a favour. I'm sure you could turn it into a serial career sticking new legit bikes on eBay whilst 'borrowing' the neighbourhood BSO's.

By far the biggest scams seem to revolve around creating companies and using them to recover vat, tax etc on private vehicles.
Not cycling to work on one's bike-to-work bike pales into insignificance in comparison.

The only problem I have (and what would fix the OP's issue) is the way companies seem to pair up. I for example can only buy one from Evans, yet I'd prefer to buy one from my LBS. If the system was tidied up so it was available to all and the voucher issued could be used anywhere then it'd be fine.

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simonineaston
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Re: Suggestion to replace cycle-to-work-scheme

Postby simonineaston » 12 Apr 2010, 1:26pm

+1 for the 'ability to pay monthly' comments. Wouldn't have used the scheme were it not for that.
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Re: Suggestion to replace cycle-to-work-scheme

Postby goatwarden » 12 Apr 2010, 1:49pm

Yes, the cycle to work scheme has been hugely abused (I know of one completely inactive gentleman who bought two kids bikes on the scheme last Christmas; perhaps if he had bought himself one he wouldn't have just had a heart attack. Poetic justice?) It has, however benefitted many people.

Your suggestion of scrappage is anathema to me, just as the car scrappage scheme was. It is simply idiotic to promote throwing away serviceable machines in order to get a discount on a shiny new one. I have made the point here before that old cars only polute if they are not properly maintained, just as their new replacements will. Even if a bike is not ridden it can provide donor parts to others, unless it is buried or melted down as a result of scrappage.

There was at least some (twisted and lazy) logic about the car scheme; it didget rid of a few polluting vehicles (which could have been cleaned up for far less cost than their replacement). The concept of scrapping bikes because they are too heavy is quite counter intuitive in the sense of the cyclescheme. Cycle to work was introduced to encourage good health and less driving through cycling. If a bike is heavy then you will probably get more health benefit from riding it as you will use more energy. Also bikes don’t create any significant pollution whilst being used or stored. Bikes do cause pollution by being made (all manufacturing creates waste and if it involves metals, environmental damage at some level is inevitable) or being buried / melted. So, it is a far better to make existing bikes last longer and use them to get fit. Just why (other than relieving the aesthetic offence caused by watching someone riding a heavy full suspension Tesco bike) will we benefit from "Removes heavy impractical bikes from the road"?

I do hope your business thrives, but please don’t kid yourself that your proposal will benefit anyone but you.

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hubgearfreak
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Re: Suggestion to replace cycle-to-work-scheme

Postby hubgearfreak » 12 Apr 2010, 1:58pm

kwackers wrote: I for example can only buy one from Evans, yet I'd prefer to buy one from my LBS.


this is outrageous, and counter intuitive to the free market mantra we enjoy/suffer in terms of energy markets, telephone providers, railways & etc. madness and i'm surprised it's legal

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Re: Suggestion to replace cycle-to-work-scheme

Postby dave holladay » 12 Apr 2010, 3:35pm

There is one option which can deliver without the current 'problem' being raised by HMRC conditions with some employers - the residual value of the bike, and how this impacts on the closing payment (sale of the bike at residual value to you after leasing it from your employer for the duration of the scheme).

That is for the employer to lease a bike or fleet of bikes and have these available for staff use, but not allocated specifically as a benefit in kind (Form P11 - and you pay for this in tax). The leased bike fleet will, like a leased car fleet, require regular servicing, and so a lessor will either have an in house workshop, or a contract with a cycle workshop to deliver servicing and support for the leased fleet.

Just as leased cars are renewed on a rolling programme, so leased bikes are renewed generating a healthy supply of secondhand bikes for sale and a regular order for new bikes. This model works for most successful and well run bike hire centres.

I'd refer you to the scheme which the Belgians used - far more sensible then the UK one for car scrappage. Hand in your old car and you get 3 years free bus travel, and 3 years free membership of the car sharing club (typically this offers a new car for £4/hour including fuel for 50 miles), and the same bus company also offers a leased folding bike (Strida) for around £10/month. Result - the removal of poorly maintained old and new cars from the road, and a regular renewal plan for the car club vehicles (smaller numbers but more consistent ordering plan).

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Re: Suggestion to replace cycle-to-work-scheme

Postby goatwarden » 12 Apr 2010, 4:53pm

dave holladay wrote:I'd refer you to the scheme which the Belgians used - far more sensible then the UK one for car scrappage. Hand in your old car and you get 3 years free bus travel, and 3 years free membership of the car sharing club (typically this offers a new car for £4/hour including fuel for 50 miles), and the same bus company also offers a leased folding bike (Strida) for around £10/month. Result - the removal of poorly maintained old and new cars from the road, and a regular renewal plan for the car club vehicles (smaller numbers but more consistent ordering plan).


That is, indeed a very good plan which was obviously conceived to reduce car journeys and relieve depedence on car ownership. Clearly they started from the right place.

The UK car scrappage scheme, on the other hand, was simply a means to boost new car sales and keep the Retail Motor Industry Federation happy. It had no tangible benefits for individuals (unless employed within RMIF) or the environment (building a new car has far more environmental impact than extending service life of properly maintained older vehicles).

The UK cyclescheme seems to have started from the right place, it just got hijacked by big traders and corrupt individuals.

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Re: Suggestion to replace cycle-to-work-scheme

Postby mark_w » 12 Apr 2010, 7:33pm

Big T wrote:One of the big attarctions of the cycle to work scheme, for me anyway, is the ability to pay for the bike monthly, without having to pay any interest. I'd baulk at paying £1000 cash for a new bike, but I'm quite willing to stump up the £60 or so per month that it costs me on cyclescheme. Your suggestion will give me a discount on a new bike, but won't let me pay monthly.


I enquired at my work about Cycle to Work scheme, as they used to be a member of the 'You at Work' scheme which had cycle to work as one of it's benefits. I was told that they no longer subscribe to You at Work and therefore no longer provide the Cycle to Work scheme which was disappointing. They did say they were looking into it, but in the same breath they also said they were investigating having showers too. Then a couple of weeks later I chased up the HR dept to be told there was no budget for it and they would keep pushing for it.

Forgive me for not wanting to hold my breath, but I don't want to wait until hell freezes over for that one to happen. Staff benefits in our place are classed as heating and lighting. We are in Yorkshire, after all :D

However, as much as I hate putting stuff 'on tick' - I did need a new bike and I didn't really want to pay out £800 in a lump sum, and one of the benefits of having sourced the bike I wanted locally (to make sure it fitted and rode OK) and then getting it from an online retailer was not just the cost saving, but that I could pay in instalments via Interest Free Credit and go the pay monthly route. I actually notice a couple of the online retailers are doing credit now via V12 (Clode) - whether interest free or otherwise. The argument for me was that for less per month than I was paying the Gym, I could have a new bike, get fit and enjoy the world vs staring at a TV screen or a mirror in a soul destroying Gym.

And I'm glad I did - clocked up 120 miles on that bike this weekend just gone and it's done not far short of 1000 miles since I got it in December.

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TrevA
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Re: Suggestion to replace cycle-to-work-scheme

Postby TrevA » 13 Apr 2010, 1:25pm

Perhaps the answer to the OP's problem, would be to offer interest free credit. This would certainly generate some sales. The sticking point for a lot of people buying a new bike is the cash outlay. Cyclescheme is one way around that, interest free credit another.

My wife's firm doesn't do the CTW scheme, so we're currently looking at a Scott Contessa for her from Evans on interest free credit.
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EdinburghFixed
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Re: Suggestion to replace cycle-to-work-scheme

Postby EdinburghFixed » 13 Apr 2010, 1:34pm

The worst you can say about the abuse of the bike to work scheme is that it allows an individual to get hold of a bike without paying tax on it. When you consider that there's a very strong argument for making bikes tax-free anyway, this is not something I loose sleep over (and probably why the existing rules are so lightly enforced).

Suppose it was "abused" to give two kids bikes who otherwise wouldn't have them. The loss of tax on two bikes is vastly less than the health costs of two sedentary kids->obese adults. In fact if tax-breaks on bikes led to even one in a hundred obese people not being obese, it would save us a lot of cash.

There are problems with the implementation of the scheme and I sympathise with the OP.

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Re: Suggestion to replace cycle-to-work-scheme

Postby gilesjuk » 14 Apr 2010, 6:35pm

I think what the OP is trying to say is that people getting a high performance road bike tax free and then continuing to drive to work is a bit pointless?

How about a scrappage scheme where you scrap a car and get a bike? :D

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horizon
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Re: Suggestion to replace cycle-to-work-scheme

Postby horizon » 14 Apr 2010, 10:47pm

HoWB Dave wrote:I am the proprietor of an independent bicycle shop. I have opened four months ago and despite newspaper adverts I am finding it difficult to drum up new bike sales.



I am just wondering how much cycling you expected your potential customers to want to do over the last four months. :?
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