Compared to their counterparts in cities such as Amsterdam and Copenhagen, Londoners have been traditionally reluctant to eschew their cars or public transport in favour of cycling to work or play.
Yes, the numbers of cyclists have risen over the years and those that do opt for pedal power over the internal combustion engine tend to be passionate advocates of what we must now call “active mobility” but cycling is still a minority sport.
But things are changing. A cycle hire scheme introduced in 2010 by the then mayor of London, Boris Johnson has proved surprisingly popular, and uptake has apparently been boosted by a move away from buses and the Underground rail system during the pandemic lockdown. For instance, in May of this year, a record 69,000 journeys were made on “Santander Cycles” on a single day – well up on 2019’s highest figure of 44,668.
Meanwhile, new cycle lanes are promised by the government in a bid to provide reassurance that cycling in the capital is relatively safe. As we look to the post-pandemic future, it could be that London is set to become a cycling city.”
Tom Hares, CEO and co-founder of Buzzbike is hoping that will be the case. Founded in 2016, the company – which rents premium bikes on a monthly subscription basis – has around 2,000 users and hopes to raise that to 7,000 next year. Crucially, demand spiked during the pandemic lockdown but Hares believes the business will continue to flourish when things return to normal. Active mobility, he believes is a trend that is here to stay.
And on the face of it, this is a good time to be a mobility entrepreneur. The question is, where does a subscription service fit into the urban mobility landscape? Buzzbike charges £39.99 a month. As an alternative, would-be cyclists might buy a cheap machine new for maybe £150 or second-hand for less. Meanwhile, the Transport for London/Santander bikes can be rented on a one-off basis when needed. When I spoke to Hares, I was keen to talk about his approach to carving out a niche in what is bound to become an increasingly competitive landscape.
From Marketing to Bicycles
With a background in marketing, Hares became interested in cycling when he returned to the U.K. from the United States. Although not a cyclist himself at that point, he looked at the congestion and pollution in London and wondered why more people weren’t getting on bikes as a means to get around. “Cycling only accounted for about two percent of urban journeys compared with 60 or 70 percent in some European cities,” he says.
“I began to look at the barriers,” he says. “They included concerns about safety, the expense of purchasing a bike, not knowing which type to chose and worries about maintenance,” he says. The aim of Buzzbike was to reduce the barriers to zero.
Initially, he and co-founder Andy Nunn looked to brand partnerships to get their show on the road. To be more specific, the idea was that Buzzbike would create a white-label service that could be painted over by brands. Under the scheme, bikes would be made available for people to cycle to work and the journeys would be gamified, using an app that track speeds and routes to enable competition between riders. The first partner was payments company Braintree, which organised a Tour de Tech. Essentially this meant inviting tech company workers to cycle to work and compare app data.
Since then, the company has done a major pivot from a brand partnership-led model to a business based on subscription. As Hares explains, that was partly because people were asking if they could keep and rent the bikes.. “We began to look at the business case around subscription,” says Hares. Meanwhile, a plan to secure a partnership deal with a corporate player was moving ahead more slowly than expected and the company’s seed money was running out. The focus shifted to subscription. “We set out to prove that we could get 40-100 subscribers a month to prove the business case,” he says.
Around about the same time, the company joined the LEAD accelerator – a program aimed at sports tech businesses – and found more investors. This cleared the way to step up marketing and ultimately the manufacture of premium bikes.
In the early brand-partnership days, the investment came from angels who got behind the concept. “When we were pitching, it was very much about people buying into our passion,” Hares. “And we also made it clear that we were prepared to leave our jobs.” One key investment came from the Cooper family (of Mini Cooper car fame) who saw a synergy with their own bike business. At the later stage, it was a case of proving the business case to investors who had the metrics of the sharing economy/subscription model at their fingertips. The key with these investors was to find a point of differentiation.
So what was the USP? As Hares sees it, the selling point was the experience. Buzzbikes offered a better rise than the Transport For London Santander bikes, he argues. “If you were buying one, it would cost about £600,” he says. In addition, the company provided insurance and maintenance as part of the subscription. “Our customers get a high-quality bike, but they don’t have to commit to the purchase,” he adds.
Opportunities and Challenges
The pandemic changed the market. “It gave us a big boost,” says Hares. “But it also created a real challenge. There was more demand but at the same time, it hit our supply chain for a while.”
The company stopped active marketing and nonetheless grew rapidly through word of mouth, albeit with a waiting list of clients.
As Hares acknowledges, investors have been buying into macro trends in mobility and subscription models. Will those trends continue. Certainly, there is a lot of activity in the mobility space. On the day I spoke to Hares, Milton Keynes became the first U.K. city to offer e-scooter hire. Others will follow following a decision to legalize their use in public roads. Government investment in cycle lanes should also help keep enthusiasm for alternative transport alive.
“We did fear a boom moment,” says Hares, but he thinks something has changed. “I don’t see people going back to public transport anytime soon.
And the alternative, for some, will be bikes and e-scooters. Good news for mobility entrepreneurs but competition is likely to intensify.