Cycle to work storm brewing as ACT call on industry to unite
A quick glance at trade forums will show how unpopular Cyclescheme’s new terms – forbidding bike shops from charging “additional fees” – have been. CIN has asked Cyclescheme if there will be any measures to sweeten the pill before it is introduced later this month, but has yet to receive a reply.
The move appears to have re-ignited the debate about fair play in the cycle to work world and how bike shops – currently experiencing alarming margin erosion – are contemplating the viability of handling cycle to work business from one its largest providers following the update. The ACT is calling on all parties to work together to act in reforming cycle to work as the priority growth strategy for the cycle trade and – of course – for all UK citizens who want to cycle more.
The ACT said it had been approached by a large number of cycle retailers calling for immediate changes, with most “unwilling to speak publicly for fear of being excluded from business opportunities by established Cycle to Work providers”.
The Association of Cycle Traders is calling on the cycle sector to unite and demand an immediate change to the way Cycle to Work is implemented. The employee benefit scheme has outlasted numerous others and is now 23 years old.
The Bira-backed ACT said: “The time has come for the industry to take steps to reform of the Cycle to Work employee benefit so that it engages all parties in the supply chain, helps realise the full potential of Cycle to Work and most critically, by working together, to get many, many more employees cycling to work.
“The delivery structure of Cycle to Work is flawed primarily due to the lack of direct engagement by the larger entities within the UK trade and the drive for commercial income by the established players in the delivery of the employee benefit.
“There are two dominant players in the market: Halfords and Cyclescheme and an ‘alliance’ of providers that appear to put business profits well ahead of cycling development.”
The ACT has gone on to highlight how Cyclescheme, part of a large US corporate business, could have re-invested some its circa £55 million profits into the UK cycle industry – deemed to have largely been drawn from the £90m-plus of revenue from the UK independent cycle retail sector, it said.
“The independent retail cycle sector has wrongly been the cash cow of Cycle to Work for over two decades and this has to change now,” explains the ACT in its statement.
“The recent enforced changes in pricing policy applied by some parties and blamed erratically upon FCA legislation is simply the straw that broke the camel’s back.”
Wider industry fears in tackling this long-term issue, the statement adds, have been fired by industry lethargy, limited financial exposure for many and the bogey man threat that Cycle to Work legislation might be withdrawn, a fear that an increasing number of IBDs are now viewing as an ‘opportunity’.
“At a time when the industry is actively seeking greater support from Government for cycling -including a call for more cycle incentive subsidies – one of the most obvious actions that the industry should take itself is reform of the Cycle to Work employee benefit. Once we have a united, fully participating industry in this area, the ACT believes that there is lots of room for further development with Government, especially around electric incentives that the car industry benefits from with Government support in the UK,” it says.
The ACT adds that alternative schemes are in place charging as little as 3% commission, but the industry needs to come together to win employer schemes, put aside brand competition and focus on collectively winning more cyclists and make more of Cycle to Work together.
Whatever side of the fence you are on, few would surely deny that Cyclescheme’s latest revamp of its terms has lit the touch paper under the cycle to work debate.