TfL explores new pricing models in next generation of cycle hire

Transport for London has revealed how it plans to re-procure the capital’s cycle hire scheme when the contract with Serco expires at the end of July 2017.

TfL is to move away from a single supplier contract, with the new arrangements seeing the various elements of the scheme, such as back and front office systems, the contact centre, on-street fixed assets, scheme integration and bike management and supply, let as separate lots, through a combination of existing and new contracts and by using TfL’s in-house capability.

Details of the new arrangements were provided by Peter Blake, TfL’s director of service operations, surface transport, to members of TfL’s finance and policy committee. 

The intention is to competitively tender only two lots specifically for the bike hire scheme: 

• Lot A: Bike management (operations, redistribution and maintenance); and 
• Lot B: next generation bike supply, including spares.

Blake said that one of TfL’s priorities is to integrate bike hire with TfL’s Oyster and Contactless Payment Card (CPC) back office systems “to support the potential installation of Oyster and CPC card readers at bike docking stations in the future”. He said the arrangements provided “a firm platform for further future integration with CPC/Oyster through the revenue collection contract”.

Explaining the immediate benefits of the new bike hire model, Blake said cycle hire users would be able to link their cycle hire account to their CPC or Oyster card. “When customers login [to their account] they would be presented with a single view of their account, with summary and link to cycle hire, Oyster and CPC transactions.” 

Integrating account systems will enable TfL to vary cycle hire charges depending on how much use customers have made of other modes, he added. Describing the concept as “one-way capping”, he said: “For instance, a customer who had reached the [daily] fare cap across the rest of the TfL network would receive a discount on cycle hire. This is a significant new benefit for TfL customers, and has the potential to drive hires.”

TfL is keen to introduce tracking of bicycles, which could be used to vary the price of bike hire. “GPS and 4G communications are being considered and early technical investigations have been positive in relation to varying trip pricing based upon the time of day or geographical location,” said Blake. 

TfL’s customer experience contact centre will take over support for the bike hire scheme. “This would enable staff to have a single view of the TfL customer and allow the customer to be able to resolve any cycle hire issues,” said Blake. “Customers would only need one point of contact for any queries about their travel charges.”  

The two new cycle hire contracts will commence on 1 August 2017. Each will run for up to ten years, with a minimum of five-and-a-half years and an option to extend up to a further four-and-a-half years. 

The contracts are scheduled to be awarded in November 2016. 

Discuss this at LTT's London Cycling Show on the 15 September