C2W Sucking the lifeblood out of Bike shops

Although the scheme(s) could be better, I am not sure I agree. Without CTW, I wouldn't have bought 1 of my bikes so the retailer would have gone without that sale altogether. On my 2nd CTW purchase I paid the admin charge so the retailer got to sell a bike for RRP, if it wasn't for CTW I'd have more than likely gone 2nd hand or built up a bike from bits.

That is only my experience, yours may vary.

I've worked at J E James and smaller local bike shops. I think that the impact of it on J E James is unlikely to be massive - Mark James is pretty greedy and I can see how losing 10% of a sale to a scheme operator would be galling for him but they don't sell many bikes on that scheme, have a large staff who aren't particularly invested in the job (Mark James being one of the reasons why - I remember him saying staff were just an overhead to him) and so don't chase up people who had bikes set aside on C2W who never come back. I quite liked working there but the way it was run was pretty chaotic. And C2W isn't really their target market - they sell more high end bikes than they do commuter stuff, and a lot of those on interest free finance which I suspect costs them more than paying a C2W scheme.

When I worked at smaller bike shops, the glut of sales when one of the local public sector organisations were running their C2W schemes was genuinely appreciated. Instead of selling a £150 bike with some cheap accessories (or, more likely, not selling anything as they went for an Apollo instead) you'd sell a £300 or 400 bike with accessories with a higher margin. You'd lose 10% to the scheme operator, but make more. The person would then also have a nicer bike, which encouraged them to get into cycling more, and they'd come back to us to service it. Three years down the line they might think "oh, that was great - I'll get a nicer bike from that little shop". They were really important sales.

Of course, the existence of the scheme providers is daft - you don't need a provider to do C2W, an employer just needs to run it through payroll. Whatever you think of the scheme, it gets more people on bikes. At my office, I'd bet half the bikes in the bike shed were bought on the scheme. Raising the bike industry's head above the parapet like this is unlikely to help them, and if they end up getting the scheme canned then it'll hurt cycle commuting too.

It's not so much about the consumer experience, it's the strain operating C2W seems to be putting on retailers that they're talking about. I was aware a couple of shops have stopped dealing with some/all schemes. But TBH I hadn't appreciated the burden of Admin/costs was being put on retailers.

the burden of Admin/costs was being put on retailers.

It is, but the majority of these sales are not cyclists buying a nice bike they intended to buy anyway, they're people who fancy trying cycling or even cycle commuting and getting a nicer bike than they would otherwise buy from the same shop. So the cost of admin, and the cost to the scheme administrator, are more than offset by the extra profit of the fancier bike you've sold.

It's pretty true, margins are so tight and some of the schemes take such a big fee as part of that margin, Halfords scheme being one of the worst for this that it sometimes not worth arranging the sale of the bike

I’ve worked at J E James and smaller local bike shops. I think that the impact of it on J E James is unlikely to be massive – Mark James is pretty greedy and I can see how losing 10% of a sale to a scheme operator would be galling for him but they don’t sell many bikes on that scheme, have a large staff who aren’t particularly invested in the job (Mark James being one of the reasons why – I remember him saying staff were just an overhead to him)

I've had the pleasure of being one of JE James overheads for a while. I don't value Mark's thoughts or opinions on anything. That place is a circus.

The fees do seem a little out of step with the general marketplace, one retailer advised my wee sister she would be better off just buying it on an interest free credit card as then she could access all the sale price bikes (most of which were discounted enough to justify 'losing' the tax saving).

I'm in a similar boat as wanted to buy some accessories to better equip me for a dark morning commute (I know, actually using C2W to cycle to work!). Between savings available on RRP and the fact that no one shop seemed to stock all the bits I wanted (nothing fancy, just e.g. a decent fluorescent jacket rather than a heavy cheap one) it just made more sense not to use C2W.

However I guess I'm an example of fussy/cheap customers sucking the life out of bike shops! 🙄

C2W is very big for us, especially this year where UK bikes seem to be almost all C2W. However I do feel a bit miffed about the fees and some companies (Yes Halfords Im looking at you) take an AGE to pay. 90 days in the case of the big H.

Many of us shops don't mind paying an extra fee, but it would need to be proportionate to the participation in the transaction - something in the 5% range before C2W becomes really viable for the bike shop. If you get a choice/have influence in who you use, I would encourage you to use Green Commute Initiative - they offer some of the lowest fees to shops, quick payment for the shop and its an easy, flexible set up for the customer or if you want a wider benefits package too try My Benefits World.

It is, but the majority of these sales are not cyclists buying a nice bike they intended to buy anyway, they’re people who fancy trying cycling or even cycle commuting and getting a nicer bike than they would otherwise buy from the same shop. So the cost of admin, and the cost to the scheme administrator, are more than offset by the extra profit of the fancier bike you’ve sold.

Dunno about that, My only experience of C2W (from the customer side) was about 18 years ago when I got an actual bike to cycle to work on. Since then I've known lots of people at the various places I've worked for whom C2W has been a tool to get a toy and deduct some income.

Jonathan Harrison:

“The scheme no longer fits the purpose for which it was originally intended - to get people to Cycle to Work,” he said. “Since the pandemic working habits have fundamentally changed, with more people working remotely therefore the ‘to work’ requirement is increasingly difficult to meet for many people.”

That to me is acknowledging that C2W isn't really being used to fund 'Commuter bikes' but more weekend toys with a nice little PAYE deduction for Middle to upper income punters.
Maybe the Rules/schemes should be restructured to reflect that and allow smaller retailers to benefit from C2W supported sales.

Whatever the verdict on J.E. James they'll have the same concerns as any other bike retailer, Narrowing margins and a scheme that chips away further won't help any retailer.

Although well intentioned it's become (at least in part) a super-regressive way for rich people to get bikes on the cheap.

I also think that it's distorted the market in the UK, pushing bike prices up.

I've benefited from it myself and I do commute by bike. I'm not sure how many do?

I do think that it's good that there's some form of tax relief available on bikes and ebikes though. I'm not sure how long that will continue, especially given the current government's form.

Of course, the existence of the scheme providers is daft – you don’t need a provider to do C2W, an employer just needs to run it through payroll.

Yes and no. HR will outsource anything they possibly can - they're not there to help the employee, they're there to make sure the employer doesn't do anything illegal when sacking you.

And these "providers" have sprung up offering all sorts of employee management options (for a fee of course) where they take on all the employee benefits and special offers and so on. Most are total cowboys - they sign up various companies (also on commission) to offer "special offers" to employees. My employer does this - everything outsourced to this external agency who email staff every week offering 1% off at Boots if you spend £200 on a Tuesday, 2.5% off a CenterParcs holiday for 4 taken during term time at any CenterParcs more than 200 miles from your home location and other total shite that no-one can possibly redeem. Oh and a C2W scheme that has so many caveats that no-one has ever used it which then gives the employer perfect reasons to say "oh no-one uses that, we'll bin it off".

It doesn't help that there are several slightly different schemes and it's become a very confusing mess of different employers offering different max payment (ours is £1000 which doesn't get you anything these days, I know of one that offers up to £5000 on C2W!), different requirements on where you can get the bike and then there are shops that work with one scheme but not another. It's a total mess at the moment.

I've spoken to a couple of smaller retailers who have a love/hate relationship with C2W. It seems fairly common now to say that C2W is only available at full RRP to protect their margins somewhat and I bet that gets a bit tiresome. I think their perception is that the scheme operators are taking a chunk of cash that's not reflective of the value that they provide in the transaction.

I'd be interested to see some data on the income brackets of who is using it. I'm not keen on the fact that high tax bracket earners are using it to buy new wheelsets for their cervelos, but I guess I can stomach that if there's still plenty of other folk using it as a way to afford a decent commuter bike.

Although the scheme(s) could be better, I am not sure I agree.

Same boat as Hooli.

Back when I worked in an LBS 15 years or so ago - it was very, very important. Drove lots of custom through the door, massively increased turnover, and really did turn a lot of people into 'cyclists' .

It possibly helped that back then we were doing it for the entire local NHS trusts, and directly between us (shop) and them (employer). No middle man taking a cut at all. It was brilliant.

Years and years later I bought through it as -
- My employer offered it.
- Never pass an opportunity to be more efficient with your tax.

And actually what happened is, I got introduced to a local shop I've never used before, as I have alwyas been a pure 100% buy online type. But they sorted me out, I've since been back numerous times, I've since bought another high end (non C2W) bike through them, and all sorts of bits and bobs, they are great.

None of which would have happened without me buying a C2W bike which I have ridden to work precisely zero times.

Is it perfect? No. Theres no need for all the middle-men schemes as mentioned above, any companies payroll clerk could run this if they could be arsed with no fees or markup.

But I think I would put the artical linked firmly in the 'be careful what you wish for' category.

I am curious what are JE James and Balfes hoping to achieve by saying CTW is killing the bike industry when @benpinnick says "C2W is very big for us, especially this year where UK bikes seem to be almost all C2W".

As with my post above, I fail to see how extra sales are a bad thing even if it does come with extra admin.

I have bought two bikes 'cash' instead of C2W to get a better deal.

We have bought 1 bike and 1 eeb on C2W. Both times we had an open conversation with the LBS about us wanting to pay over time - and our options were C2W, bike shop finance or small loan ourselves. Both times we ended up doing C2W, as the savings to us with tax were significant and mean we did not have an issue paying RRP. The EEB was actually a cracking deal - LBS and importer had one left from last year in our size... I *think* we pleased everyone, and we ended up with the bike we wanted.

A replacement I'd like to see... reduced tax for retailers and/or frame builders below a certain size... like the tax breaks for microbreweries (Small Brewers Relief and whatever it was replaced with). It wouldn't solve the problem of the tax break being regressive though (people who can afford a new bike get the tax break when those that can't don't) but could be a much needed shot in the arm for LBS and/or UK manufacturing. And remove the need for a middleman/service/admin.

Its killing the industry because it makes it impossible to make a decent margin on a bike - if you have to give up 15% for the paperwork - thats half your profit. Recent changes to the biggest C2W company's terms mean that participating shops now have to offer all bikes all the time at the price on the ticket, including sale bikes etc. with no additional fees. For us that costs us around £250 profit per bike on average.

The truth is that C2W is both regressive and to a greater extent pointless. A vanishingly small percentage of people ride to work on a C2W bike, and it benefits higher earners the most. It also skews the secondhand and repair markets too. The discount just changes the budget, but in reality would I rather sell a £2000 bike at full margin or a 3k one at half? 2K all day long please. Where it really drives sales is the interest free finance element - you're getting 12m interest free no credit checks etc.

Although well intentioned it’s become (at least in part) a super-regressive way for rich people to get bikes on the cheap.

I also think that it’s distorted the market in the UK, pushing bike prices up.

I’ve benefited from it myself and I do commute by bike. I’m not sure how many do?

I do think that it’s good that there’s some form of tax relief available on bikes and ebikes though. I’m not sure how long that will continue, especially given the current government’s form.

That is how I see it too.

I remember when it first came in there was a £1k limit (was that originally imposed by HMRC?) which did seem to gradually get repealed and turned into an Employer/Scheme operator discressionary choice. So I now know people using it to fund £3-5k+ bikes that seldom/never get ridden to work, there's nothing there to stop them so I can't blame people for abusing the scheme.

From my remembering of things ~2005-2010ish seemed to be 'Peak C2W' when the likes of Boardman were spec'ing out £999 Alloy framed Road and MTB offerings with decent parts which could credibly be used for commuting and a bit of fun at the weekend, he target was specifically meeting the C2W scheme needs.

These days I question if 90% of bikes bought on C2W actually get used for commuting, or are even appropriate for that task...

I’d be interested to see some data on the income brackets of who is using it. I’m not keen on the fact that high tax bracket earners are using it to buy new wheelsets for their cervelos, but I guess I can stomach that if there’s still plenty of other folk using it as a way to afford a decent commuter bike.

Ditto, I wonder if the stats are even gathered though.
I know I'd be cutting my nose off to spite my face (I'm probably in the target market to sacrifice a bit of taxable income) but I'd rather see C2W underwriting more affordable commuter bikes getting into the hands of people on more modest incomes and saving them money than helping to fund toys for the rich boys (and girls). At the same time, I'd like to see it stimulate the cycle industry at all levels.

What is the view (from those who have had industry dealings with) of CycleSolutions?
They are our provider and I've had direct and via LBS from them (work for an NHS Trust with 10,000 empoyees). They do/did a 10% discount if using them direct.

Haven't read it yet (I will, honest) but, more broadly, my employer trumpets its sustainability credentials by offering C2W - but doesn't provide secure bike parking, shower facilities or enough locker capacity. Despite this, after seeing me cycling into work and locking my bike discreetly beneath a fire escape out of public view behind a fence, other employees started doing this. Rather than embracing this and providing dedicated bike storage facilities, my employer (one of the UK's biggest employers...) started muttering about safety and banning use of the area for bikes - at which point I started talking about the power of social media. Six months later I'm still locking my bike beneath a fire escape but, unfortunately, my colleagues have given up over winter.

C2W in my workplace is just a tax deductible tool for managers to buy toys they load onto the backs of their cars.

It wouldn’t solve the problem of the tax break being regressive though (people who can afford a new bike get the tax break when those that can’t don’t)

On a related note, the shop I worked in (this was pre-C2W) offered 0% credit over 6 months and the people that went for it were entirely the ones that could afford the bike full price anyway. Anyone who could really have done with a cheap bike to get to uni/work on could never pass the credit checks but they couldn't afford the bike in one hit. £50-80 a month for 6 months they could have managed but it was always "computer says no".

And the ones who used it would take up hours of time with filling out the form and us phoning it through... I remember when one guy got refused (after taking up said hours of time), eh just pulled out his credit card and said "OK, I'll put it all on that then..." Hours wasted.

With the price of bikes now and the popularity of e-bikes, cargo bikes etc, there really needs to be a better way to deal with this - a sort of cycling equivalent to PCP car finance for example.

What is the view (from those who have had industry dealings with) of CycleSolutions?

They're really slow at paying the shop (not as bad as halfords) and take iirc 12%

Is there a reason we can't  remove any vat on a bike up to a certain value? Maybe a higher value for an ebiike but set at a level that allows you to buy a good commuting bike. Benefits every one equally rather than being more favourable to higher rate tax payers and no admin costs for bike shops 

The place I work ptomotes C2W to boost green credentials. Scheme allegedly round every six months but I've not seen it once in the 12 months I've been there. The operator only gives you a year so there's a 25% BIK at the end of the scheme. Hardly seems worth it even if they did run it.

I remember when it first came in there was a £1k limit (was that originally imposed by HMRC?)

I'm pretty sure the limit was to do with credit licences - over the £1k and your company would need to have a credit licence to offer the scheme but under it and no licence was needed. The rules around this were changed and the limit disappeared. 

Companies could (and some did) offer more than £1k with the appropriate admin.

Is there a reason we can’t remove any vat on a bike up to a certain value? Maybe a higher value for an ebiike but set at a level that allows you to buy a good commuting bike. Benefits every one equally rather than being more favourable to higher rate tax payers and no admin costs for bike shops

Not a bad suggestion, I was thinking about means assessment, or just pre-tax income caps. But limiting/staggering VAT relief makes sense.

Over and above that though it sounds like the percentages taken by what simply amount to middlemen (Scheme operators) need to be controlled/capped.

I do  think the c2w providers are onto a very cushy number, they get a decent % for doing very little.  It should be a fixed admin fee per transaction based on the actual costs to serve + margin.

My work scheme is halfords, despite me trying to convince them otherwise and add GCI as an option.  They have however bumped up the limit to £4k from £1k to enable decent e-bikes to be an option

I've used c2w for 2 bikes, however the last 2 were bought in the sales so I could get a better deal without using it.  I bascially see it as a way to get an interest free loan and spread the cost via payroll

If a bike shop doesn't offer c2w on a discounted bike, I'm simply not going to use them.  RRP has reached piss taking levels and has completely put me off buying a new bike.  I've been fix on fail since pre covid.  I'd really like a road bike with discs too(which yes, would get ridden to work).  Decent sale price and option to use C2W is the only way I'll part with my money in these leaner times

Green Commute Initiative 

I've recently used these guys, by all accounts it was very easy for both employer and the shop, with the fees for the shop at a reasonable (not cheapest) level.  AS others have said, i would not have been buying full RRP on what i spent, i'm a serial german bike shop/discount buyer normally.  At the end of it all, i got what i want at roughly the same cost vs sale stuff, but it meant the local bike shop got a decent deal.

I would just like to be able to do it!

Its killing the industry because it makes it impossible to make a decent margin on a bike – if you have to give up 15% for the paperwork – thats half your profit.

I guess the question is, how many of the cycle to work people would buy a new bike if the scheme wasn't there? If you get double the sales, it somewhat offsets making half the profit.

I had a cycle scheme bike last year (GCI), I'd not have bought one if it wasn't for the cycle scheme. Probably wouldn't even have bought one second hand.

I must be a rare case then, I bought my bike at full retail on C2W, commute on it regularly. Just added a Quickrack to it to enable pannier attachment as my tail pack was marking the seat post...

Almost 12 months later, the bike is now available discounted by about the same saving I got by buying C2W....

Which is this biggest Cw2 scheme that allows bikes to be bought sale prices? Every shop I've seen is quite clear that they will add on fees depending on what the schemes charge them?

Cyclescheme is both the biggest and since December is requiring shops to sell at ticket price only.

Why haven't Madison or any of the other distributors not setup their own competing schemes with better terms?

I have bought plenty of bikes on C2W. My main commuter is a C2W bike so I feel I tick that box.

My most recent purchase was a Trek Fuel. I doubt I'll be riding to work on it often. The bike was heavily discounted so the indie bike shop asked me to pay the admin fee, which I was happy to do. So bike shop sold it for same price they would have to any other punter, I got my decent tax discount, winner winner.

But... I do think the C"W scheme is fundamentally flawed.  The people who really need the health and economic benefits from bikes are the lowest earners. They often cannot access the scheme as they don't earn enough, or even if they can access the scheme, they will save less than their better paid management team.  In my last workplace one of our shop floor guys got exactly the same bike at the same time as me. But I saved more money, because I am higher rate tax payer. Its just not right and all feels just a bit, Tory.

I'd much rather see a meaningful VAT reduction on bikes so everyone benefits.  More bikes sold, more people cycling, healthier society, quieter roads, better place for everyone.

So the problem is the buerocracy and cost of the scheme providers. Communist observations about the income of workers using the scheme are irrelevant as the whole point of it is getting people off public transport and out of cars onto a healthier alternative, not whether Comrade Worker Smith 3rd Level deserves a State bicycle more than a Comrade Worker Jones on a higher job grade.

I ride in daily on a C2W bike, I wouldn't have bought it without the scheme.

While I support the idea of controlling vat 9n bicycles, anyone remember what happened when they took vat off helmets? They just got more expensive. The buying public certainly didn't feel the benefit, we very rarely do.

Why haven’t Madison or any of the other distributors not setup their own competing schemes with better terms?

I'm not sure that this would help. The problem is largely that HR departments tend to equate C2W with Cyclescheme or Halfords in my experience. As mentioned above most HR departments outsource it to Cyclescheme and then pat themselves on the back as a C2W job done. Big companies tend to favour a small number of suppliers for reasons no understood by me. Combination of that plus the matrix of facilitators/shops and all the other factors (I don't think the 'final value' thing has been mentioned yet) makes the whole thing a confusing mess.

Communist observations about the income of workers using the scheme are irrelevant as the whole point of it is getting people off public transport and out of cars onto a healthier alternative, not whether Comrade Worker Smith 3rd Level deserves a State bicycle more than a Comrade Worker Jones on a higher job grade.

They are not irrelevant if you cannot access the scheme in the first place if you are low pay or part time. So setting aside the lower/higher rate tax argument, surely you would agree that there should be universal access to the benefit? A VAT reduction and interest free loans would achieve the same outcome but without the current limitations.

Big companies tend to favour a small number of suppliers for reasons no understood by me.

If it is public sector, the hoops you have to go through with procurement are just insane. Has to be shown to be fair, equitable, best value for money etc or has to be proven that there was only one supplier who could achieve the required outcome*.

And since Cyclescheme has the best marketing and is "the known name" in that area, everyone just goes with that, regardless of how shitty the T&Cs are. Plus the employer doesn't care about what the bike shop does or doesn't get anyway.

*unless you're in central Government of course in which case you do exactly the opposite, set up VIP lanes for your mates, suggest to the landlord of your favourite pub that he could make a nice bit on the side if he suddenly becomes an expert in PPE and so on...

Presumably retailers can decide themselves if they want to continue to work with Cyclescheme with the new Ts & Cs?
Is it different from any other type of lead generation?

If it is public sector, the hoops you have to go through with procurement are just insane. Has to be shown to be fair, equitable, best value for money etc or has to be proven that there was only one supplier who could achieve the required outcome*.

And since Cyclescheme has the best marketing and is “the known name” in that area, everyone just goes with that, regardless of how shitty the T&Cs are.

I don’t see how your second para follows from your first?

I don’t see how your second para follows from your first?

Public sector procurement has to go out to tender for most things - what ends up happening in these sort of situations is that a raft of HR functions (including employee benefits) are outsourced to a company that has successfully bid to provide these. There are God only knows how many of these absolute sharks around the place; it's the sort of thing that winners of The Apprentice go on to do alongside SEO optimisation and recruitment.

And it's them that then go with the locked down provision of Cyclescheme and refuse to consider any other provider. Meanwhile the employer just goes "oh well it's not up to us..."

So the problem is the buerocracy and cost of the scheme providers. Communist observations about the income of workers using the scheme are irrelevant as the whole point of it is getting people off public transport and out of cars onto a healthier alternative, not whether Comrade Worker Smith 3rd Level deserves a State bicycle more than a Comrade Worker Jones on a higher job grade.

I ride in daily on a C2W bike, I wouldn’t have bought it without the scheme.

Wot No Citizen Smith Meme? Standards are slipping 😉